Nvidia (NVDA 0.36%) and Taiwan Semiconductor Manufacturing (TSM 0.40%) are key players at different points along the artificial intelligence (AI) value chain. While Nvidia is the leading designer of the graphics processing units (GPUs) used to handle most AI workloads, TSMC is the global leader in fabricating and packaging advanced logic and memory chips.
Both have benefited from the AI megatrend -- but which of these companies looks like a better long-term stock buy from here?
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Nvidia
Nvidia has visibility into nearly $500 billion in combined Blackwell and Rubin revenue from the start of 2025 through the end of calendar 2026, of which $150 billion has already been shipped. The company's networking business is also generating multibillion-dollar revenues, with its proprietary high-speed GPU interconnect NVLink, high-performance networking standard InfiniBand, and the AI-optimized Ethernet platform Spectrum-X becoming integral parts of AI deployments worldwide.
Production of Nvidia's next-generation Vera Rubin platform is also on schedule to ramp up in the second half of 2026; those platforms, which will combine its new Vera CPU with its Rubin GPU, will support cloud, enterprise, robotics, and physical AI workloads.
NASDAQ: NVDA
Key Data Points
However, Nvidia depends extensively on TSMC's ability to manufacture chips using the most advanced process nodes. Also, while President Donald Trump recently loosened some of the trade restrictions he had imposed that were preventing Nvidia from selling AI-optimized chips to Chinese companies, it is still prohibited from selling its most advanced chips to that market.
Taiwan Semiconductor Manufacturing
TSMC now earns a bulk of its revenue from producing advanced chips (7-nanometer and below), which are used heavily to handle high-performance computing workloads. The company is advancing its 2-nanometer (N2) process node toward volume production and recently highlighted its plans to start producing chips using its performance-enhanced N2P variant in 2026.
TSMC is also working on its even more feature-dense and power-efficient A16 process node, with volume production scheduled for the second half of 2026.
NYSE: TSM
Key Data Points
Additionally, TSMC plans to scale its monthly Chip on Wafer on Substrate (CoWoS) advanced packaging capacity from current levels of 75,000 to 80,000 wafers to as high as 120,000 to 130,000 wafers by the end of 2026, directly addressing the major bottleneck constraining chip shipments.
Yet the geopolitical risks faced by Taiwan cannot be ignored by TSMC investors.
Hence, I must conclude that Nvidia is better suited for long-term investors focused on upside potential, while TSMC may be a good pick for investors who would prefer a more resilient stock.
