Nvidia’s Huang says TSMC among all-time greats: Buying its stock is ‘very smart’

Nvidia CEO Jensen Huang lauded Taiwan Semiconductor Manufacturing Co. (TSMC) during a Taiwan visit, calling it one of humanity's greatest companies and endorsing investment in its stock, as TSMC develops six new products for Nvidia, including its next-gen AI chip Rubin. This strong endorsement comes amidst conflicting signals regarding potential U.S. government equity stakes in CHIPS Act recipients, following Commerce Secretary Lutnick's confirmation of Intel talks and a Wall Street Journal report denying broader plans. The dynamic underscores TSMC's critical role in the advanced semiconductor supply chain and the evolving, yet uncertain, U.S. industrial policy for chip sector resilience.

Analysis

The strategic partnership between Nvidia (NVDA) and Taiwan Semiconductor Manufacturing Co. (TSM) has been strongly reaffirmed by Nvidia CEO Jensen Huang, who labeled an investment in TSM as 'very smart' and described the firm as 'one of the greatest companies in the history of humanity.' This endorsement is substantiated by the fact that TSM is manufacturing six new products for Nvidia, including its next-generation 'Rubin' AI chip platform, cementing TSM's indispensable role at the core of the AI hardware supply chain. This development occurs amidst significant policy uncertainty from Washington regarding the U.S. CHIPS Act. While Commerce Secretary Howard Lutnick confirmed discussions for a 10% equity stake in 'troubled' competitor Intel (INTC), a subsequent Wall Street Journal report cited an official denying broader plans to take stakes in firms like TSM. This conflict creates a notable risk factor for TSM, which has been allocated $6.6 billion in funding to support its $165 billion U.S. investment expansion. Despite these geopolitical crosscurrents, TSM's market strength is reflected in its 6.5% year-to-date share price increase.

Key Decisions for Investors

• The explicit endorsement from Nvidia's CEO and TSM's critical role in the next-generation 'Rubin' AI platform reinforces a bullish thesis on TSM, highlighting its technological moat and pricing power in the advanced semiconductor sector.
• Investors should closely monitor for any definitive U.S. government policy on taking equity stakes in CHIPS Act recipients, as this represents the primary source of uncertainty and a potential risk factor for TSM's valuation despite its operational strength.
• The contrasting narratives—the symbiotic growth of the NVDA-TSM partnership versus the description of Intel as 'troubled' and subject to government intervention—suggests a potential re-evaluation of relative weightings within semiconductor portfolios, favoring leaders in the AI supply chain.