This Stock Set to Surpass Nvidia Over the Next 3 Years
Nvidia has experienced dramatic growth in recent years, becoming a leader in the graphics processing unit (GPU) market. However, increasing competition presents challenges that could impact its revenue. Over the next three years, experts suggest that Taiwan Semiconductor Manufacturing Company (TSMC) could surpass Nvidia’s growth.
Nvidia’s Market Position and Growth
Nvidia’s stock has surged an impressive 1,390% over the past three years. A $10,000 investment made in October 2022 would have grown to approximately $148,800 today. Despite this success, market analysts predict potential pressure on Nvidia’s revenues as it faces competition.
Emerging Competition
- Advanced Micro Devices (AMD) is actively pursuing market share in the GPU sector.
- AMD has partnered with OpenAI to supply multiple generations of GPUs.
- Tech giants like Alphabet, Amazon, Microsoft, and Tesla are developing their own semiconductor chips.
- Chinese companies are also entering the semiconductor fabrication market.
Currently, Nvidia maintains over 90% in the GPU market, but this share may decline due to these competitive threats.
The Role of TSMC in Semiconductor Manufacturing
TSMC is critical to the semiconductor supply chain, fabricating chips for Nvidia and its competitors. In 2024, TSMC manufactured over 11,800 products and utilized 288 distinct processes. Moreover, it produces 60% of its revenue from essential 3 nm and 5 nm chips.
Plans for Future Production
TSMC is set to begin mass production of 2 nm chips. According to Statista, TSMC holds approximately 70% of the current semiconductor fabrication market. This dominance is not expected to change significantly, as TSMC has relationships with major companies including AMD, Amazon, and Apple.
Investment in U.S. Fabrication
Trade issues and tariffs have been a major concern for the semiconductor industry. In response, TSMC is investing $165 billion to expand its fabrication capacity in Arizona. Six new fabrication plants are under construction in Phoenix, aimed at producing Nvidia Blackwell chips among others.
Revenue Growth and Projections
TSMC’s revenue has experienced significant year-over-year growth, maintaining a 36% increase. Here’s a summary of TSMC’s revenue estimates:
| Month | Net Revenue | Year-Over-Year Change |
|---|---|---|
| January 2025 | $9.59 billion | 39.5% |
| February 2025 | $8.50 billion | 43.1% |
| March 2025 | $9.35 billion | 46.5% |
| April 2025 | $11.43 billion | 48.1% |
| May 2025 | $10.48 billion | 39.6% |
| June 2025 | $8.63 billion | 26.9% |
| July 2025 | $10.57 billion | 25.8% |
| August 2025 | $10.98 billion | 33.8% |
| September 2025 | $10.10 billion | 31.4% |
The total projected revenue for TSMC in 2025 is estimated to reach $90.42 billion, with predictions for next year’s revenue exceeding $147 billion.
Conclusion: TSMC’s Competitive Edge
With its growing capabilities and strategic expansions, TSMC appears well-positioned to outperform Nvidia over the next three years. As the semiconductor industry evolves, TSMC’s role as a key manufacturer ensures it remains essential to major tech companies, highlighting its promising future.
