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ASML is the leading semiconductor equipment company with 90% market share.
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TSMC manufactures the most advanced AI processors in the world and possesses competitive advantages that could last for decades.
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Both stocks are great to own, but Taiwan Semiconductor Manufacturing is slightly cheaper.
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10 stocks we like better than Taiwan Semiconductor Manufacturing ›
There are many good artificial intelligence (AI) stocks available to invest in right now, but it can be difficult to know which one is the best to invest in over the long term. Investors seeking top AI stocks have likely encountered ASML Holdings (NASDAQ: ASML) and Taiwan Semiconductor Manufacturing (NYSE: TSM), two of the leading companies in the AI infrastructure sector.
With both companies offering a unique angle in the AI market, it’s worth asking which could be the better artificial intelligence stock to buy right now? Here’s the case for both and why Taiwan Semiconductor, also referred to as TSMC, might have the slight edge over ASML.
ASML is a leading AI infrastructure company that manufactures the machinery used to produce semiconductors. ASML has been the leader in this space for years and currently holds 90% of the lithography market share. The latest estimates put ASML’s rivals at least a decade behind the company’s tech.
If that weren’t enough to pique your interest, consider that ASML not only sells its expensive machinery to large tech companies — TSMC included — it also generates recurring revenue from its equipment sales through service contracts. In the first nine months of 2025, ASML’s service revenue was up 39% to 6 billion euros ($7 billion). And with ASML’s equipment often being in service for several decades, there are plenty of years of service revenue ahead.
With ASML’s customers ramping up spending, the company’s sales and earnings are increasing. Revenue jumped 21% in the first nine months of this year to 23 billion euros ($27 billion), and diluted earnings per share popped 40% to $17.38 per share. Add to all that the fact that ASML enjoys gross margins in the low 50% range, and you’ve got a very profitable AI company with a bright future ahead.
If you’ve been following AI stocks closely, TSMC is probably on your radar (or already in your portfolio). The company is the leading manufacturer of advanced processors, taking an estimated 90% of the market.
The primary difference between the company and ASML is that TSMC manufactures AI processors, whereas ASML produces the equipment used to create these processors. Business is booming for TSMC right now as tech giants invest heavily in new data centers. This spending spree led to TSMC’s sales doubling in the third quarter to $33 billion and earnings jumping 39% to $2.92 per American depositary receipt (ADR).
