NVIDIA and Taiwan Semiconductor Manufacturing Company (TSMC) play vital roles in the global AI chip supply chain. While NVIDIA designs GPUs for AI models, TSMC manufactures these chips. Both companies face challenges and offer growth opportunities, making it important to analyze their financial performance and future prospects.

NVIDIA dominates AI computing, with strong data center revenues and new GPU platforms driving growth. However, export restrictions have impacted sales, slowing revenue growth. Despite this, NVIDIA’s long-term prospects remain robust as AI demand rises.

Taiwan Semiconductor’s advanced production capabilities have led to a 39% revenue increase and a 61% profit jump. With strong AI-related revenue growth and investments in future technology, TSMC’s outlook is positive. The company raised its revenue growth guidance and is positioned well for the future.

In terms of EPS estimate trends, both NVIDIA and Taiwan Semiconductor show strong growth ahead. NVIDIA’s EPS is expected to rise by 42.1% in fiscal 2026, while TSMC’s EPS is projected to grow by 34.7% in 2025. Both companies have seen upward trends in their EPS estimates.

NVIDIA and TSMC have performed well in 2025, with NVIDIA shares rising by 28.9% and TSMC shares soaring by 24.1%. While NVIDIA’s P/E multiple is higher, TSMC offers better value relative to its growth potential. Taiwan Semiconductor is a smarter choice for investors seeking a solid AI play with a better risk-reward balance.

Investors looking for a strong AI investment should consider Taiwan Semiconductor over NVIDIA. TSMC’s core position in the AI chip supply chain, lower geopolitical risk, and reasonable valuation make it a better bet. With strong growth potential and a Zacks Rank #2 (Buy), TSMC is positioned for success.

Read more at Nasdaq: NVDA vs. TSM: Which Semiconductor Stock Is the Better AI Investment?