NVDA vs TSM Stock Comparison 2026: Nvidia vs TSMC: AI Score, Valuation, Performance and Upside
Nvidia and TSMC are both critical to the AI chip supply chain but in complementary roles. Nvidia designs the AI GPUs; TSMC manufactures them. Both have extraordinary moats — Nvidia through CUDA software lock-in and GPU dominance, TSMC through manufacturing process technology leadership. Nvidia carries higher valuation multiples as a design company with software moat; TSMC is more capital-intensive but extremely valuable as the indispensable manufacturer of the AI era's most critical chips.
NVDA vs TSM is the AI chip designer with CUDA software moat and 80%+ market share in training AI (Nvidia) versus the world's only manufacturer of leading-edge semiconductor processes including those same Nvidia chips (TSMC) — complementary positions in the AI supply chain with very different risk profiles.
NVDA holds the edge across 4 of 5 key metrics in this comparison. TSM has delivered stronger 1-year price return (+63.52% vs +26.12%), though NVDA has the better forward P/E setup (14.21x vs 19.83x for TSM). NVDA leads on both revenue growth (105.90%) and operating margin (66.24%), suggesting a stronger fundamental setup on both dimensions. Analyst consensus implies meaningfully more upside for NVDA (+48.66%) than for TSM (+27.05%).
Human Wall Street analysts' price targets, typically implying a ~12-month view — a separate signal from this site's own AI Prediction Signal further down the page, which is a 5-/30-day machine-learning forecast based on price history alone.
- prefer the dominant AI chip designer with CUDA software ecosystem lock-in making Nvidia hardware irreplaceable even if competitors match silicon performance
- value Nvidia's full-stack AI infrastructure position from GPU chips through networking (InfiniBand) and software (CUDA)
- want maximum leverage to AI infrastructure investment growth — Nvidia captures the most profit per AI training run of any company in the supply chain
- are comfortable with extreme valuation multiples, hyperscaler concentration risk, and AMD/Google/Amazon chip competition
- prefer the indispensable chip manufacturer enabling Apple, Nvidia, and AMD products — no alternative semiconductor company can match TSMC's leading-edge process
- value TSMC's pricing power from irreplaceability — leading-edge process customers have no credible foundry alternative
- want semiconductor infrastructure exposure with somewhat lower valuation multiples than fabless designers like Nvidia or AMD
- are comfortable with Taiwan geopolitical risk, US fab expansion cost pressures, and customer concentration in Apple and Nvidia
| Metric | NVDA | TSM |
|---|---|---|
| AI scorei | 87.4 | 78.6 |
| AI ranki | #3 | #17 |
| Latest closei | $222.27 | $434.67 |
| 1M returni | +2.16% | +5.76% |
| 6M returni | +24.48% | +32.69% |
| 1Y returni | +26.12% | +63.52% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | NVDA | TSM |
|---|---|---|
| 1Y ago | $12.61K (+26.1%) started 2025-09-18 | $16.52K (+65.2%) started 2025-09-18 |
| 5Y ago | $105.67K (+956.7%) started 2021-09-20 | $44.61K (+346.1%) started 2021-09-20 |
| 10Y ago | $1.44M (+14328.9%) started 2016-09-19 | $237.01K (+2270.1%) started 2016-09-19 |
Hypothetical — past performance does not guarantee future results.
| Metric | NVDA | TSM |
|---|---|---|
| Market capi | $5.25T | $2.25T |
| Trailing P/Ei | 27.47 | 32.46 |
| Forward P/Ei | 14.21 | 19.83 |
| Price/Salesi | 23.66 | 0.51 |
| EV/Revenuei | 17.23 | 3.52 |
| Analyst targeti | $323.42 | $552.26 |
| Target upsidei | +48.66% | +27.05% |
| Metric | NVDA | TSM |
|---|---|---|
| Revenue growthi | 105.90% | 36.00% |
| Earnings growthi | 127.80% | 77.40% |
| EPS growthi | +127.80% | +77.40% |
| FCF margini | +13.80% | +16.46% |
| Operating margini | 66.24% | 60.34% |
| Profit margini | 63.66% | 49.92% |
| ROIC proxyi | 117.21% | 39.97% |
| Return on equityi | 117.21% | 39.97% |
| Dividend yieldi | 0.46% | 0.94% |
| Payout ratioi | 3.54% | 25.74% |
| Dividend growth streaki | No increase yet | 2 yrs |
| Betai | 2.21 | 1.25 |
| Debt/equityi | 16.97 | 16.50 |
| Current ratioi | 4.59 | 2.46 |
| Quick ratioi | 2.92 | 2.13 |
Over the past year, NVDA and TSM have moved moderately in the same direction (correlation of 0.62), based on daily returns.
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | NVDA | TSM |
|---|---|---|---|
| 1Y | Growthi | +26.12% | +63.52% |
| CAGRi | +26.14% | +63.57% | |
| Volatilityi | 37.93% | 40.42% | |
| Sharpe ratioi | 0.68 | 1.31 | |
| Sortino ratioi | 1.02 | 2.01 | |
| Max drawdowni | 20.22% | 21.55% | |
| Current drawdowni | 5.71% | 8.74% | |
| Avg drawdowni | 9.00% | 5.88% | |
| Ulcer Indexi | 10.19% | 7.69% | |
| Max daily dropi | 6.20% | 6.98% | |
| Max wkly dropi | 10.72% | 11.05% | |
| 5Y | Growthi | +954.74% | +310.53% |
| CAGRi | +60.26% | +32.68% | |
| Volatilityi | 52.02% | 38.39% | |
| Sharpe ratioi | 1.08 | 0.81 | |
| Sortino ratioi | 1.67 | 1.24 | |
| Max drawdowni | 66.34% | 56.47% | |
| Current drawdowni | 5.71% | 8.74% | |
| Avg drawdowni | 16.75% | 17.66% | |
| Ulcer Indexi | 24.20% | 23.30% | |
| Max daily dropi | 16.97% | 13.33% | |
| Max wkly dropi | 22.20% | 16.17% | |
| 10Y | Growthi | +14093.98% | +1731.63% |
| CAGRi | +64.16% | +33.76% | |
| Volatilityi | 50.04% | 34.80% | |
| Sharpe ratioi | 1.15 | 0.88 | |
| Sortino ratioi | 1.76 | 1.33 | |
| Max drawdowni | 66.34% | 56.47% | |
| Current drawdowni | 5.71% | 8.74% | |
| Avg drawdowni | 15.48% | 12.88% | |
| Ulcer Indexi | 22.77% | 18.07% | |
| Max daily dropi | 18.76% | 14.03% | |
| Max wkly dropi | 28.36% | 16.17% |
| Category | NVDA | TSM |
|---|---|---|
| Company | NVIDIA Corporation | Taiwan Semiconductor Manufacturing Company Limited |
| Sector | Technology | Technology |
| Industry | Semiconductors | Semiconductors |
| Core business | Nvidia designs graphics processing units (GPUs) and AI accelerator chips used in data centers, gaming, automotive, and professional visualization. Its H100/H200/B100 Blackwell data center GPUs have become the critical infrastructure for training and running AI models. Nvidia's CUDA software platform creates software lock-in — AI developers build on CUDA, making Nvidia GPUs difficult to replace even if competing hardware reaches parity. Software, services, and networking (Mellanox InfiniBand) round out Nvidia's AI infrastructure stack. | TSMC is the world's largest semiconductor contract manufacturer, producing chips for Nvidia, Apple, AMD, Qualcomm, and virtually all fabless semiconductor companies. TSMC's leading-edge processes (3nm, 2nm) are used by Apple's M-series chips and Nvidia's AI GPUs. TSMC doesn't design chips — it manufactures them to customers' specifications. Its competitive moat is its manufacturing process technology lead, which has been impossible for Intel or Samsung to close despite multi-decade investment. |
| Investor focus | Investors track data center revenue growth, H100/B200 GPU demand and lead times, CUDA developer ecosystem expansion, and automotive AI design wins from NVIDIA DRIVE platform. | Investors track capacity utilization at leading-edge nodes, CoWoS advanced packaging capacity (critical for AI GPU chip-on-wafer stacking), and the pace at which HPC (high-performance computing) revenue grows as AI chip demand accelerates. |
- CUDA software ecosystem lock-in: 4M+ developers build AI applications on CUDA, creating switching costs that transcend hardware performance comparisons
- Data center GPU market domination with 80%+ market share — Nvidia's H100 is the de facto standard for AI training and inference
- Full-stack AI infrastructure from chips (GPU) to networking (InfiniBand) to software (CUDA/TensorRT) creates a moat deeper than silicon alone
- World's only manufacturer at 3nm and 2nm with the best manufacturing yield, making TSMC indispensable to Apple, Nvidia, AMD, and Qualcomm
- CoWoS (chip-on-wafer-on-substrate) advanced packaging is critical to AI GPU performance — Nvidia's H100 and Blackwell chips depend on TSMC's CoWoS capacity
- Pricing power from irreplaceability — TSMC is raising prices for leading-edge processes as customers have no alternative foundry at equivalent technology
- AMD MI300X, Intel Gaudi, and custom AI chips from Google (TPU), Amazon (Trainium), and Microsoft (Maia) all challenge Nvidia's GPU dominance
- Concentration risk: 40%+ of Nvidia data center revenue comes from a handful of hyperscalers (Microsoft, Google, Amazon, Meta)
- US export controls on advanced AI chips to China removed a significant revenue stream and may tighten further
- Taiwan political risk — China's stated ambition to reunify Taiwan represents existential operational risk for TSMC's manufacturing concentration on the island
- US, Japan, and Germany fab expansions (Arizona TSMC fab, Kumamoto, Dresden) may dilute TSMC's Taiwan margin advantage with higher-cost off-island capacity
- Customer concentration: Apple, Nvidia, and AMD represent the majority of TSMC's leading-edge revenue — customer slowdowns directly impact TSMC
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