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This Artificial Intelligence (AI) Stock Is Underappreciated and Undervalued

Published

3 days ago

July 14, 2025

Technology stock valuations are hovering near all-time highs, but some value plays are hiding in the background.

Both the S&P 500 and Nasdaq Composite indexes are hovering around all-time highs. Unsurprisingly, a euphoric narrative surrounding all things touching artificial intelligence (AI) has helped fuel stock prices into the stratosphere.

It’s no secret that valuations in the technology sector are frothy right now. But even so, smart investors have been able to identify some under-the-radar value opportunities.

While companies such as Nvidia, Broadcom, and Advanced Micro Devices fetch a lot of attention in the semiconductor landscape, I’d encourage investors to take a hard look at one of their peers: Taiwan Semiconductor Manufacturing (TSM -0.70%).

Let’s explore TSMC’s unique role in the chip market, as well as the company’s long-term growth prospects and current valuation trends. In my eyes, TSMC is both underappreciated and undervalued, but these dynamics might not last for much longer.

What does Taiwan Semiconductor do?

Semiconductor companies have been some of the biggest beneficiaries throughout the AI revolution. But why?

Chipsets known as graphics processing units (GPUs) are capable of running sophisticated algorithms in parallel, helping businesses achieve breakthroughs across myriad generative AI applications more efficiently. Nvidia and AMD are the two market leaders in GPU design right now.

In addition, companies like Broadcom supply a host of network infrastructure equipment and services needed to outfit data centers with the most advanced AI architectures.

In the background lies TSMC. The company specializes in fabrication and foundry services that help bring chips from the design phase to an actual, physical product. According to data compiled by TrendForce, TSMC holds a 68% share of the global wafer foundry market.

Considering TSMC’s massive lead over the competition, it’s important for investors to understand just how much companies such as Nvidia and many other leading AI developers rely on it.

Image source: Getty Images.

Wall Street is bullish and it’s easy to see why

According to Market.us, the total addressable market for semiconductors is expected to reach $996 billion by 2033 — up from $530 billion just two years ago.

Market.us goes on to project that the semiconductor foundry market will witness an 8.5% compound annual growth rate (CAGR) between 2024 and 2033 — reaching a size of $276 billion by early next decade.

To support these forecasts, consider that global management consulting firm McKinsey & Company reports that AI infrastructure spend could reach nearly $7 trillion by the middle of next decade. Moreover, the firm suggests that chips and related hardware for AI data centers will receive nearly half of this allocated spend.

TSM Revenue Estimates for Current Fiscal Year data by YCharts

These secular trends all bode well for TSMC, as rising demand for chips is a direct tailwind for the company’s foundry business. Per the figures above, Wall Street analysts are calling for continued revenue and earnings acceleration for TSMC over the next few years as the company seeks to capitalize on rising infrastructure spend.

Is Taiwan Semiconductor stock a buy right now?

With a forward price-to-earnings (P/E) ratio of 24.3, TSMC is trading at a considerable discount when benchmarked against many other leading chip stocks. What is a bit ironic is that companies such as Nvidia, AMD, and Broadcom rely heavily on TSMC’s services, and yet the market places a premium on those businesses over TSMC’s.

TSM PE Ratio (Forward) data by YCharts

As explored above, TSMC is the king of fabrication and foundry services given its market-leading position. Moreover, rising capital expenditures from cloud hyperscalers and continued investment in data center infrastructure suggests that demand for chips remains robust. As a result, TSMC has a high degree of visibility into its future growth prospects.

Although TSMC’s valuation is higher than historical averages, it remains at a considerable discount to levels seen throughout the back half of 2024. If anything, though, its growth narrative has strengthened over the last several months. For these reasons, it may not be flying under the radar for too much longer.

With those factors in mind, I think the company’s current price is reasonable and I see Taiwan Semiconductor as a hidden bargain in a sea of overpriced growth stocks right now. This is a compelling buy-and-hold opportunity for investors with a long-run time horizon.

Adam Spatacco has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.

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Brand Stories

Google AI Mode is getting a bigger AI brain from Gemini

Published

2 hours ago

July 18, 2025

Eric Hal Schwartz

Google has upgraded its AI Mode with the advanced Gemini 2.5 Pro
AI Mode has also added Deep Search, which can now run hundreds of background searches
A new calling tool built into Search lets Google call businesses on your behalf

Google is continuing to try to get you to use its AI Mode when searching online with new and enhanced AI tools. The conversational search tool has made Google’s Gemini 2.5 Pro AI model available in AI Mode, along with the long-form report writing tool Deep Search.

Google AI Pro and AI Ultra subscribers in the U.S. who are also part of the AI Mode experiment in Search Labs will now see an option to choose Gemini 2.5 Pro when asking tough questions as well.

This is the same heavyweight model behind Google’s most advanced AI tools. They’ll also have the option of using Deep Search, a feature available in the regular Gemini app that can simultaneously run hundreds of searches and will write up a report piecing together the information.

The more profound changes, though, are in how Search itself is evolving. Gemini 2.5 Pro doesn’t just fetch answers. It reasons. It explains math in full steps. It even writes code and tells you what that code is doing. And when paired with Deep Search, it can essentially conduct a research marathon on your behalf.

AI calling in

The new call feature for Search is something entirely different. It connects your search for information about a store to a phone call with AI. As Google shows in a demo, you can type “pet groomers near me” and ask for information not immediately accessible.

Instead, you can tap “Have Google call for you,” which will prompt Google to call local shops, ask about availability or rates, and then text or email the results directly to you. If that sounds like Google Duplex, that’s because Google’s Duplex technology powers it.

Of course, all this comes with a few asterisks such as having to pay for a subscription. Free users still get some limited AI call attempts, but the advanced AI Mode tools are reserved for paying customers.

Google’s advantage over other AI developers is the sheer size of its Search database, so even as OpenAI and others attempt to produce similar products, Google might have a lasting edge. Still, there’s a learning curve.

AI that does too much too fast can lead to problems. You don’t want your research assistant skipping over credible sources in favor of a Reddit thread with 38 upvotes. And you certainly don’t want your AI calling the wrong person to schedule a colonoscopy.

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Brand Stories

Teachers gather to talk artificial intelligence in the classroom

Published

4 hours ago

July 18, 2025

Nicki Marker

HUNTSVILLE, Ala (WHNT) — Our world is constantly evolving, and lately, a lot of that evolution has been in the form of artificial intelligence.

“This is the future,” Kala Grice-Dobbins said. “It’s not going away, and we want our teachers to be informed, but also our students to be informed.”

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Grice-Dobbins is a cybersecurity teacher with the Madison County School System.

Thursday, more than 150 teachers from across North Alabama gathered to talk about AI and the use of it in the classroom.

“It’s clearly a novel technology– new for kids, new for teachers, and they’re trying to figure out how to use it,” Randy Sparkman said. “So we’re just trying to bring resources and bring these, Madison County districts, particularly, together to talk about strategies for using AI in the new school year.”

Sparkman is a part of Mayor Tommy Battle’s AI task force. They put on the AI in education event.

Gov. Ivey announces more than $3.7 Million in Rebuild Alabama Funding for local road projects across Alabama

Grace-Dobbins said she uses AI for help with things like lesson plans and recommendation letters.

“All of us use templates every day,” she said. “Why can’t it be our template to start with, and then we edit it because nothing’s perfect when it comes out.”

She said it’s easier than you think to spot students plagiarizing by using the tool.

“It’s not going to be your top of the line type paper,” she said. “It’s not going to be written in their kind of language. It’s not going to have their kind of thoughts involved, and so the more you know your students, you’re going to know this is not you.”

Angela Evans is also a teacher. She said she’s already been using AI in her classroom for years.

She has a message for those who may be skeptical. What she’d tell people.

“Don’t be scared because change is nature,” she said. “We are going to progress our humanity. Our intelligence is going to continue to progress.

For the latest news, weather, sports, and streaming video, head to WHNT.com.

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Brand Stories

Virginia Is First State to Use Agentic AI for Regulatory Streamlining

Published

5 hours ago

July 17, 2025

PYMNTS

Virginia is launching a pilot program that will use artificial intelligence (AI) agents to streamline regulations — the first such effort in the country — and reinforce the state’s standing as a friendly place to do business.

Gov. Glenn Youngkin issued an executive order to deploy AI agents to review and streamline Virginia’s regulations. The tool will scan all regulations and guidance to identify areas where there are conflicts with the statute, as well as redundancies and complex and unclear language.

“We have made tremendous strides towards streamlining regulations and the regulatory process in the Commonwealth,” Youngkin said in a press release. “Using emergent artificial intelligence tools, we will push this effort further in order to continue our mission of unleashing Virginia’s economy in a way that benefits all of its citizens.”

The new executive order adds to two other 2022 orders, which had mandated Virginia agencies to streamline regulations by at least 25%.

To date, state agencies have already streamlined regulations by 26.8% on average and cut 48% of words in guidance documents.

The new executive order is expected to help agencies struggling to hit the 25% regulatory reduction goal and give a further boost to those that have already met or exceeded requirements. The goal is to ensure the streamlining is done “to the greatest extent possible,” according to the governor’s office.

See more: Tech Giants Seek 10-Year Freeze on State AI Rules

All States Now Have AI Bills or Laws

The launch comes as Congress removed a 10-year ban on state AI regulations that was part of President Donald Trump’s “One Big Beautiful Bill.”

At present, states are accelerating AI regulation. All 50 states plus D.C., Puerto Rico and the Virgin Islands introduced AI legislation in 2025, with more than half enacting measures covering areas such as algorithmic fairness, transparency and consumer protections, according to a blog post by the law firm Brownstein Hyatt Farber Schreck.

In California, major bills include SB 420, which will establish an AI bill of rights, and SB 243, which aims to protect minors from chatbot manipulations. There’s also AB 1018, which seeks to ensure AI systems exhibit fairness in housing and hiring decisions, according to Brownstein.

In New York, SB 6453 has passed both chambers to be the first state law to restrict “frontier” or advanced AI models, according to Brownstein. In Connecticut, SB 2 is a comprehensive AI bill that awaits final votes.

Texas, Colorado, Utah and Montana have already enacted AI laws, and uncertainty about their enforceability has been lifted, the law firm said.

Meanwhile, California’s Judicial Council is considering requiring all 65 courts to adopt policies governing generative AI use unless they ban it outright, according to Reuters. If adopted, it would be the largest court system in the country with an AI policy.

Other states where court systems already have an AI policy include Illinois, Delaware and Arizona. States considering adopting an AI policy for their courts include New York, Georgia and Connecticut.

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