Investors Eye Potential in Vanguard S&P 500 ETF and TSMC

Investors are turning towards the Vanguard S&P 500 ETF as index investing proves rewarding. The promising future of Taiwan Semiconductor, including significant AI chip sales growth, could interest S&P investors seeking diversification.

Date: 18-02-2025

AI Rating: 7

Market Performance of Vanguard S&P 500 ETF

The Vanguard S&P 500 ETF (VOO) has demonstrated significant growth, with the S&P 500 rising approximately 70% in the past 28 months following a bear market. This growth is primarily due to developments in technology and artificial intelligence, which have caught the attention of investors.

Potential Growth of Taiwan Semiconductor Manufacturing (TSMC)

TSMC (TSM) is noted for its crucial role in the semiconductor industry, particularly in AI chip manufacturing. Management forecasts an impressive 40% annual growth in AI-related sales and an overall 20% compound annual revenue growth over the next five years. Such projections indicate strong future performance, making TSMC a compelling investment opportunity.

Capital Investments and Market Position

With a planned $40 billion in capital expenditures for 2025, TSMC aims to enhance its production capabilities, ensuring it remains competitive. Its 60% market share and advanced technology position it favorably amongst peers, making it an attractive long-term investment for those seeking exposure to the semiconductor market, especially in AI.

Investment Strategy for Index Fund Holders

Investors in Vanguard's S&P 500 ETF may also consider adding stocks like TSMC to balance their portfolios, given that it holds a significant position in the AI chip market. Reallocating around 2% of index holdings could yield fruitful results as TSMC’s growth potential aligns with broader market trends.

Stocks: VOO TSM NVDA AAPL