Exceptional Momentum Powers Taiwan Semiconductor Manufacturing’s (TSM) Rally

Soumya Eswaran Mon, July 6, 2026 at 11:17 AM EDT 4 min read **

• TSM

RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its "RiverPark Large Growth Fund" Q1 2026 investor letter. A copy of the letter can be downloaded here. The US stock market declined in the quarter with the S&P 500 index ("S&P") and the Russell 1000 Growth index ("RLG") falling 4.33% and 9.78%, respectively. Markets started the year positively but became volatile mainly due to increased tensions with Iran. The Federal Reserve kept rates unchanged in January and February. Still, rising energy prices and weaker economic data sparked concerns about stagflation, leading investors to rethink the timing and scale of future rate cuts. Investor sentiment shifted from growth and tech stocks amid inflation, interest rate, and supply chain concerns. Opposing AI-driven rotations heavily influenced investor sentiment, affecting growth stocks—enthusiasm grew for semiconductor firms linked to AI infrastructure spending, while enterprise software companies, viewed as vulnerable to AI disruption, faced pessimism. The Fund's software holdings were sold off heavily, while the underweight in semiconductor companies, which benefited most from AI infrastructure spending, affected the performance. Despite challenges, the firm remains confident in the long-term prospects and valuations of its portfolio companies. Please review the Fund's top five holdings to gain insights into their key selections for 2026.

In its first-quarter 2026 investor letter, RiverPark Large Growth Fund highlighted Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as a top contributor to performance. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world's leading contract chip manufacturer, producing advanced semiconductors for major global technology companies. On July 2, 2026, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) closed at $434.16 per share. One-month return of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was 9.44%, and its shares gained 93.52% over the past 52 weeks. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has a market capitalization of $2.00 trillion.

RiverPark Large Growth Fund stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2026 investor letter:

"Taiwan Semiconductor Manufacturing Company Limited** (NYSE:TSM): TSM was the second-largest contributor for the quarter, gaining 11% despite significant volatility driven by the Iran conflict and associated risk off selling in March. TSMC's underlying business momentum was exceptional throughout Q1: the company reported January 2026 monthly revenue up 37% year-over-year, February revenue up 22% year-over-year, and March revenue surging 45% year-over-year, with Q1 2026 revenue totaling approximately $35.6 billion, up 35% year-over-year and above expectations. The $56 billion capital expenditure plan for 2026 and management's announcement that capacity is effectively sold out through year-end underscored the durability of AI chip demand. The January U.S.–Taiwan trade agreement, which secured favorable tariff treatment for Taiwanese semiconductor exports, also provided incremental support for the stock.

We view TSMC as the global linchpin of advanced semiconductor manufacturing, uniquely positioned to benefit from the secular expansion of AI compute. Its unmatched technological leadership across 3nm and 2nm processes, trusted customer relationships with NVIDIA, Apple, and AMD, and disciplined capital allocation support durable pricing power and expanding margins."

** Story Continues Is TSM a good stock to buy? Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 6th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026**. According to our database, 234 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the first quarter, up from 224 in the previous quarter. In Q1 2026, Taiwan Semiconductor Manufacturing Company Limited's (NYSE:TSM) revenue increased 6.4% (in U.S. dollar terms) sequentially to $35.9 billion, exceeding the guidance. While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE: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 thebest short-term AI stock.

In another article, we covered Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) and shared BlackRock's most important AI stocks right now. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.