TSM, down 14% in the selloff, trades at about 18 times next year's earnings, an excellent opportunity; next-quarter revenue is guided to about $53.3 billion, up 58% year over year, with faster growth through 2029, and lower margins and heavy capex are the price of being the AI era's most important chipmaker.

While Wall Street is focused on heavy selling, two of the biggest AI companies, TSMC and ASML, quietly announced their earnings. Therefore, it understands the long-term needs of AI companies .

TSMC is ASML's largest customer . One day later, TSMC exceeded its expectations, announcing that revenue for the next quarter would rise by approximately 58% compared to last year, with no signs of slowing down.

Let's start then with Taiwan Semiconductor Company (TSMC), which is an important indicator in this field. TSMC recently announced its earnings, telling investors that it expects revenues of approximately $53.3 billion in the next quarter.

This represents a 58% year-over-year increase, a huge number for a company with a market capitalization of around $2 trillion. During the call, the CEO of TSMC said they will likely see faster growth through 2029.

It is worth noting that TSMC is one of two companies that anticipate increased demand for artificial intelligence in the future.

Now, customers contact TSMC two or three years before the scheduled date. For this reason, they also expect to spend about $62 billion on capital expenditures for 2026, an increase of approximately 50% from last year, and say they will spend much more through 2028.

Furthermore, TSMC's gross profit margin fell from 67.7% to 66.4% as they continue to ramp up their new 2nm chip manufacturing operations, and they expect a further slight decline in margins in the next quarter.

TSM's stock has fallen 14% since the start of the sell-off and is now trading at about 18 times next year's earnings , which I see as an excellent investment opportunity. But while Wall Street is punishing the stock , I think increased spending and lower margins are just the price of being the most important chipmaker in the entire AI era.

The problem here is the slim profit margins , with Coherent's gross profit margins at around 40% compared to TSMC's 66%.

Now, we're back to square one , because this is exactly the huge demand that ASML and TSMC are experiencing. The Chat fund also includes Celestica, Vertiv, TSMC, ASML, Coherent, Micron, SK Hynix and Broadcom, making it an excellent way to own the entire AI supply chain.

While the EUV fund allocates 20% because it is another excellent option for investing in chip and machinery manufacturers, such as TSMC, ASML and Applied Materials.

Shares of TSMC, Micron, SK Hynix and Broadcom are trading at lower forward earnings ratios than the Nasdaq 100, while being among the fastest- growing companies in their respective sectors of the supply chain.

ASML and TSMC believe that demand for artificial intelligence will last longer than almost any other company, and they recently stated that demand for advanced chips will exceed supply for at least two years.