Just been thinking about semiconductor plays lately, and honestly TSMC keeps coming up as one of the best semiconductor stocks to buy right now. The stock hit some serious gains in 2025 — up over 50% — but here's the thing: it might still have more room to run heading into the second half of 2026.

What's wild is how TSMC has actually expanded its dominance despite all the AI chip demand chaos. Last I checked, they're sitting at around 72% market share in the foundry space. Samsung's the closest competitor and they're only at 7%. That's not even close. The gap widened even though everyone and their mom is trying to get AI chips made right now.

The reason is pretty straightforward — nobody else has the scale or the tech to pump out high-end chips like TSMC can. When you're talking hundreds of billions of dollars flowing into AI infrastructure, companies aren't messing around. They go where the best stuff gets built.

Nvidia's a huge part of this story. Their partnership with TSMC has been rock solid through Hopper, Blackwell, and now Rubin's coming later this year. That $500 billion order backlog Nvidia's been talking about? A lot of that's flowing through TSMC's fabs. Nvidia's basically gone from being Apple's second customer to their top customer, which tells you everything about where the money's going.

What makes TSMC compelling as a best semiconductor stock to buy is the valuation picture. Yeah, it's trading at around 30x earnings, which sounds steep on the surface. But the growth trajectory is insane — analysts are modeling nearly 29% annual earnings growth over the next few years. When you factor that into the PEG ratio, it's sitting around 1, which is genuinely attractive for a company this dominant.

I'm usually comfortable paying 2 to 2.5x PEG for quality businesses, and TSMC's the clear leader in their space. Even if growth comes in a bit below expectations, there's enough margin of safety here that it still works as a long-term hold.

The way I see it, TSMC's position in the AI boom gives this one a pretty solid floor underneath it. As long as the AI spending doesn't totally implode — which seems unlikely given how much capital's already committed — this best semiconductor stock to buy should keep benefiting from that tailwind. Worth keeping on the radar if you're looking at the chip space.