We just covered Harvard University Stock Portfolio 2026: Top 10 Picks. Taiwan Semiconductor (NYSE:TSM) ranks #1 (see Harvard University Stock Portfolio 2026: Top 5 Picks).
Harvard’s Stake: $232,102,708
Taiwan Semiconductor (NYSE:TSM) is the biggest holding of Harvard Management, as of the end of the first quarter.
TSMC is one of the biggest beneficiaries of the AI revolution. It manufactures the world’s most advanced semiconductors. Every major AI chip and high-performance processor is made in TSMC’s fabs. 74% of Taiwan Semiconductor’s (NYSE:TSM) wafer revenue comes from advanced nodes (7nm and below). No competitor can match TSMC at this scale.
This gives it a powerful and durable moat. New process technologies like A13 and N2U are already in development. TSMC is expected to stay ahead of rivals for years to come. Margins are expanding dramatically. Gross margin rose 7.4 percentage points year-over-year. Operating margin hit 58.1% in the latest quarter. Taiwan Semiconductor (NYSE:TSM) has significant pricing power. Costs are being managed very efficiently. Revenue growth is equally impressive. Q1 revenue jumped 40.6% year-over-year. For the full year, the company expects growth of over 30%. AI demand shows no signs of slowing down. Despite all this, the stock trades at a forward P/E of just 26. That is only a slight premium to the broader tech sector. The valuation is still below levels seen in late 2025. For the world’s most critical chip maker, that price looks very reasonable.
Green Alpha Investment stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2026 investor letter:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has commenced mass production of 2nm chips using nanosheet Gate-All-Around transistors—the most significant architectural leap in a decade—with initial yields already reaching 70-80%, well ahead of any competitor. The N2 node delivers a 15% performance boost at the same power or a 25-30% reduction in power consumption versus 3nm, and TSMC expects to reach (Click Here to Read the Letter in Detail).”
Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.
While we acknowledge the potential of TSM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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