China's DeepSeek AI development caused AI stock sell-off, but Taiwan Semiconductor and AMD are good buys.

From Nasdaq: 2025-03-08 04:15:00

In January, China’s DeepSeek AI caused a sell-off in AI stocks by developing efficient algorithms for large language models, potentially reducing the need for expensive GPUs. Nvidia’s stock fell after earnings and new tariffs from Trump. Semiconductor stocks like Taiwan Semiconductor and Advanced Micro Devices are now more appealing at lower prices.

Taiwan Semiconductor Manufacturing (TSMC) is the largest chip manufacturer globally, preferred by companies like Nvidia and Apple. TSMC’s technology lead allows it to attract major customers and reinvest in R&D. It recently announced increased capital investments, reflecting strong demand for high-end AI chips.

TSMC also plans to invest $100 billion in the U.S., expanding its facilities and technology. With shares trading at a favorable price-to-earnings ratio, TSMC’s competitive moat positions it well to benefit from growing chip demand, especially in AI applications.

Advanced Micro Devices (AMD) is second to Nvidia in valuable GPUs for AI training. While its recent outlook disappointed, AMD’s potential in the AI chip market remains high. With opportunities to gain market share and strong relationships with tech companies, AMD’s stock is currently undervalued, offering growth potential.



Read more at Nasdaq: AI Chipmaker Stock Sell-Off: Here Are My Top 2 Semiconductor Stocks to Buy Now