Market Reaction to Trump’s Victory
The cryptocurrency market experienced a temporary uplift when President Donald Trump won the election, as some investors anticipated that his more lenient stance on crypto regulation and support for specific coins would drive up the prices of various digital assets.
Current Challenges for Cryptocurrencies
However, factors like tariff threats, recession concerns, and a growing sense of pessimism among investors have led to a decline in many cryptocurrencies over recent months. Similar to tech stocks, they have faced a downturn; yet, I believe that tech stocks hold greater long-term potential due to their solid use cases.
Promising Tech Stocks
Here are two tech stocks that might outperform cryptocurrency gains in the years to come.
Taiwan Semiconductor Manufacturing (NYSE: TSM)
As the world’s leading semiconductor manufacturer, Taiwan Semiconductor has significantly benefited from the increased demand for chips driven by artificial intelligence. Notably, it produces around 90% of the global supply of AI processors.
Financial Success and Future Prospects
The company’s financial outcomes have been impressive, with sales rising 37% in the fourth quarter to reach $26.9 billion, alongside a 57% increase in diluted earnings per share to $2.24. Despite recent concerns regarding an AI market slowdown, many tech companies continue to invest in AI, which is expected to sustain the demand for advanced semiconductors.
Nvidia’s Position in the AI Sector
Similar to Taiwan Semiconductor, Nvidia (NASDAQ: NVDA) holds substantial long-term potential. Though it doesn’t manufacture semiconductors, its chip designs are integral to many advanced AI processors currently available. Nvidia’s accelerators make up around 95% of AI chips globally, resulting in a 78% increase in sales during the last quarter, totaling $39.3 billion, and an 82% growth in diluted EPS to $0.89.
Conclusion: A Grounded Investment Opportunity
While investors may have valid reasons to consider cryptocurrencies, companies like Taiwan Semiconductor and Nvidia offer a more stable investment, contributing to the advancement of AI technologies. Although there are uncertainties in the market, the established nature of AI suggests that technology firms will continue to develop around it for the foreseeable future.
