Key Points
Nvidia has transformed itself into more than just a GPU maker.
Broadcom is riding the wave of custom AI chip solutions.
TSMC is one of the biggest AI infrastructure beneficiaries.
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One of the premier tech investors today is Tiger Global’s Chase Coleman, and the billionaire hedge fund manager was busy putting money to work in a trio of semiconductor stocks in Q1. With the artificial intelligence (AI) infrastructure market booming, this is still a great place to find top growth stocks.
During the quarter, Coleman added to his already large holdings in Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), and Taiwan Semiconductor Manufacturing (NYSE: TSM). All three stocks are among his top 10 holdings, with Nvidia at No. 2 behind Alphabet, at 9.2% of his holdings; TSMC at No. 4, with an 8.2% position; and Broadcom at No. 7, at 4.9% of his portfolio.
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Let’s look at what might have attracted Coleman to these names and why they all still look like solid buys.
Image source: Getty Images.
1. Nvidia: The LLM training leader
Nvidia is the dominant name in AI infrastructure, especially for AI model training. The company has created a wide moat in this area through its CUDA software platform, which it planted in early AI research labs and, as a result, is where most foundational AI code is written and optimized for its graphics processing units (GPUs).
The large language model (LLM) training market will remain its bread and butter, but it is also well positioned for inference and agentic AI. Its “acquisition” of Groq and its language processing units (LPUs) helps it attack the memory-intensive inference market, while it has also developed its own central processing units (CPUs), which are important for agentic AI. The company also has a strong networking portfolio.
Overall, Nvidia has quietly transformed itself from a chipmaker into a complete AI infrastructure player that can deliver customers end-to-end server solutions designed for specific AI tasks, including training, inference, and agentic AI. That makes it a solid buy.
2. Broadcom: The custom chip champion
Broadcom is quickly becoming one of the most important companies in the chip sector. A leader in application-specific integrated circuit (ASIC) technology, it helped Alphabet co-develop its highly regarded Tensor Processing Units (TPUs). With Alphabet spending big on data centers and the company starting to let some select customers order TPUs directly from Broadcom, this is a huge opportunity.
At the same time, other hyperscalers (owners of large data centers) are also turning to Broadcom to help them develop their own custom chips, especially for inference. While ASICs lack the flexibility of GPUs, these hardwired chips are often more cost-effective, especially with inference, since they consume less energy. Broadcom views this as a more than $100 billion opportunity in its fiscal 2027 alone.
Between its ASIC business and fast-growing data center networking segment, Broadcom is set to see explosive growth in the coming years. That makes it one of the most exciting AI infrastructures to own right now.
3. Taiwan Semiconductor Manufacturing: The AI chip arms dealer
One of the biggest beneficiaries of the AI infrastructure build-out and the number of different chips now going into data centers is Taiwan Semiconductor Manufacturing. The company is the world’s leading foundry and has a near-monopoly on the manufacturing of advanced chips.
While TSMC has competitors, it has proven to be the only chip manufacturer that can make advanced logic chips with few defects at scale. That has made it not only an invaluable cog in the semiconductor value chain but also given it tremendous pricing power.
The best thing about an investment in TSMC is that the increased competition in the AI semiconductor space is actually a tailwind for it, as it means more companies are competing for its services. Regardless if hyperscalers use GPUs or AI ASICs, TSMC wins, as it manufactures both. Meanwhile, increasing demand for high-performance CPUs due to the rise of agentic AI only adds to its growth drivers.
This all makes TSMC one of the best ways to play the AI infrastructure build-out.
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Geoffrey Seiler has positions in Alphabet and Broadcom. The Motley Fool has positions in and recommends Alphabet, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.