Taiwan Semiconductor and Amazon: AI Growth Drivers

Taiwan Semiconductor and Amazon are poised for growth driven by AI investments. TSMC expects revenue increases while managing construction costs, and Amazon focuses on diversifying its AI and e-commerce services, fueling potential stock price increases.

Date: 31-05-2025

AI Rating: 7

**Taiwan Semiconductor (TSMC) Analysis**
The report highlights TSMC's impressive revenue growth potential, with a target CAGR close to 20% through 2029. The company has recently reported a substantial 35% increase in revenue in the first quarter, along with a gross margin of 58.8%. Maintaining a gross margin of 53% is part of its plans, aligning with the projected demand driven by artificial intelligence (AI) developments. Investors will welcome the projected doubling of demand by 2025, primarily from AI-driven data centers.
However, TSMC is also facing short-term pressures due to overseas manufacturing challenges and potential impacts on margins during the transition phase. The significant $100 billion investment in U.S. production facilities is seen as crucial for long-term competitiveness and profitability, as it aims to mitigate risks associated with geopolitical tensions and trade wars.
**Amazon Analysis**
Amazon is heavily investing in its AI capabilities, anticipating that these initiatives will drive substantial growth for the company. AWS remains a cornerstone of Amazon’s profitability, accounting for 63% of operating income in Q1. Amazon's vast market share in e-commerce (approximately 40%) cements its foundation for growth. Notably, the company’s foray into AI through various channels, including advertising and fulfillment optimization, points towards a strategic, diversified growth plan. Furthermore, a year-over-year revenue increase of 18% in advertising speaks volumes about its rapidly expanding revenue streams.
**Earnings Metrics Summary**
Unfortunately, the report does not provide specific figures for EPS, net income, or operating margins for either TSMC or Amazon beyond their gross margins and revenue growth. Nonetheless, the ongoing developments in demand and technological advancements present a generally positive outlook for both entities.
In conclusion, both stocks represent opportunities within the current market landscape, with AI being a pivotal growth driver in their respective sectors.

Stocks: TSM AMZN