Artificial intelligence (AI) has come a long way since ChatGPT set the craze in motion in late 2022, with companies like Microsoft (NASDAQ: MSFT) and Nvidia (NASDAQ: NVDA) spending hundreds of millions to develop the technology further.
But it’s not only the behemoths with thirteen-digit market caps that are profiting from the AI revolution — semiconductor companies like Taiwan Semiconductor Manufacturing Company (NYSE: TSM) and Innodata (NASDAQ: INOD) are also poised to benefit in the coming years.
1. Taiwan Semiconductor Manufacturing Company
While Nvidia is still the household name when it comes to AI, Taiwan Semiconductor Manufacturing Company is the largest contract chipmaker in the world, dominating approximately 90% of the market and working not only with Nvidia but Advanced Micro Devices (NASDAQ: AMD), Broadcom (NASDAQ: AVGO), and Qualcomm (NASDAQ: QCOM) as well.
The company has seen a +264.15% growth in the past five years, and its pure-play foundry market share is expected to hit 66% before the end of 2025, undoubtedly driven by strong demand for 3nm and 5nm chips.
Indeed, TSMC’s computing branch was responsible for more than half of the company’s revenue last year, as reported by Bloomberg.
With plans to develop novel 2nm chips and expand its operations globally, TSMC is well-positioned to capitalize on the growing demand for artificial intelligence.
Indeed, TSMC sales have already grown by 42% last month ahead of US tariffs, its solutions finding more and more use in everything from data centers to smartphones and electric vehicles (EV).
Accordingly, some predictions have it that TSMC stock might go up by as much as +30.89% in the next year.
2. Innodata
With somewhat different revenue pipelines, Innodata specializes in data engineering services and annotated data necessary for training AI models employed by clients across the technology, finance, and healthcare sectors.
Indeed, despite its smaller size, Innodata already has a history of business partnerships with five of the Magnificent Seven, which helped the company’s revenue surge by 96%.
Moreover, the rise of specialized large language models (LLMs), which require domain-specific annotated data such as that provided by Innodata, could spell more opportunities for the New Jersey company.
With that in mind, some estimates suggest that INOD stock could see as much as a +121.30% increase in the following 12 months.
All in all, TSMC and Innodata have the potential to become even more integral to the AI chain, manufacturing advanced chips and supplying the data necessary to train new language models. If the current industry trend continues, the two companies could experience significant growth.
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