Got $1,000? The Best Pick-and-Shovel Growth Stock for the AI Supercycle Isn't American.

By Chris Neiger – Apr 6, 2026 at 2:00PM ESTKey PointsTaiwan Semiconductor's sales spiked by 100% last year, driven by surging AI revenue.The company holds 70% of the advanced processor manufacturing market.New markets, such as the $255 billion AI inference market, should help the company grow for years to come.Some of the most advanced artificial intelligence (AI) companies, both public and private, are headquartered in the U.S., including Nvidia, OpenAI, Anthropic, Microsoft, and Palantir. And investors can no doubt benefit from owning shares in many of them. But there's one AI stock that's not based in the U.S. that looks like a fantastic place to put $1,000 right now.

Taiwan Semiconductor Manufacturing (TSM +0.34%), also known as TSMC, is the best pick-and-shovel stock that benefits no matter which AI software companies win in the coming years. Here's why this growth stock more than deserves to be on your buy list. Image source: Getty Images. 1. Its revenue doubled and earnings surged in 2025 It's easy to find AI stocks with soaring prices and nearly incomprehensible valuations that aren't profitable. You don't have to worry about any of that with TSMC. The company's sales doubled last year to $122.4 billion, and its earnings spiked 46% to $10.65 per American depositary receipt. TSMC's impressive results came as demand for its AI chip manufacturing drove AI revenue up 48% from 2024 to $71 billion. This is the part where I remind you that TSMC benefits from the expansion of artificial intelligence, no matter who's winning. This means that, as Alphabet, Meta Platforms, Amazon, and Microsoft ramp up their capital expenditures to a collective $650 billion this year, TSMC sits back and lets them fight it all out for AI dominance while it reaps the benefits. 2. TSMC holds 70% of the chip manufacturing business This advantage can be an easy one to overlook, because in the ultra-competitive technology sector, market share can sometimes shift quickly. But that's very unlikely to happen with TSMC, because it has spent years creating a durable moat around its business through its advanced manufacturing prowess. For example, Samsung and Intel are TSMC's rivals, but their manufacturing processes aren't as advanced as TSMC's and don't have the same high-yield manufacturing rates. And research from Morningstar indicates TSMC can maintain its manufacturing lead because it has close relationships with tech giants and "structural cost advantages." This means that not only does TSMC have nearly three-quarters of the global manufacturing capacity, but it has also invested in the right technology and is the best at using it to continue making the best semiconductors. That dominance has given TSMC a decades-long lead over its rivals, according to Morningstar. ExpandNYSE: TSMTaiwan Semiconductor ManufacturingToday's Change(0.34%) $1.16Current Price$340.20Key Data PointsMarket Cap$1.8TDay's Range$338.62 - $344.2052wk Range$134.25 - $390.20Volume4.4MAvg Vol14MGross Margin58.73%Dividend Yield0.99% 3. The company could benefit from AI for years to come TSMC's management says sales will increase 30% this year -- and the company will likely continue growing at a steady pace for years to come. I already mentioned the AI spending surge that's happening this year from a handful of leading tech companies, and it's worth remembering that the AI race is just a few years old. Imagine the early days of the internet, and trying to figure out what companies would exist in the following decades, and how much money they'd spend on developing new tech. It's difficult to guess what new products AI will help bring about, let alone how much processing may be needed to run them. For example, the AI inference market -- where AI models are trained to improve decision-making -- is expected to grow from $106 billion today to $255 billion by 2030. Increasing demand for new markets like this could help TSMC churn out advanced processors for years to come. No AI stock comes with a guarantee, but if you have $1,000 to put toward a dominant tech company that will benefit as long as companies need advanced processors, then Taiwan Semiconductor looks like a no-brainer buy.Read NextApr 4, 2026 •By Adria CiminoIs the "Magnificent Seven" Era Over? Here Are the Stocks That Replace ThemApr 3, 2026 •By Keithen DruryThe Top AI Semiconductor Stocks to Buy Right NowApr 3, 2026 •By Manali Pradhan, CFA1 Reason Why April 10 Could Be Huge for Taiwan Semiconductor ManufacturingApr 2, 2026 •By Parkev Tatevosian, CFAI'm Upgrading This Unstoppable Semiconductor Stock to a BuyApr 2, 2026 •By Brett Schafer2 Industrial Stocks You'll Wish You Bought in 2026 a Decade From NowApr 1, 2026 •By Harsh ChauhanPrediction: Nvidia's Vera Rubin Platform Will Create at Least 2 New Artificial Intelligence (AI) Millionaire-Maker Stocks by the End of 2026About the AuthorChris Neiger has been a contributing Motley Fool technology and automotive analyst since 2012.

Before The Motley Fool, Chris was an automotive journalist for the BBC. He holds a master’s degree in journalism from Regent University and a bachelor’s degree from the University of Delaware.TMFNewsieStocks MentionedTaiwan Semiconductor ManufacturingNYSE: TSM$340.10(+0.31%)+$1.06*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.