Instead of Amazon, the "Magnificent Seven" should include this stock.

Amazon (NASDAQ: AMZN) has been a tech giant for decades, giving long-term investors huge returns. Recently, the company's results have been uneven. Amazon stock has nearly doubled in a year, but that's because it plunged so much in the 2022 bear market. Even if the S&P 500 and Nasdaq Composite are at record highs, Amazon hasn't surpassed its 2021 top.

While Amazon's recent results have been good, it appears to be losing ground. Amazon Web Services' revenue growth slowed to 13% in the fourth quarter, trailing Microsoft Azure and Alphabet's Google Cloud. Walmart has surpassed its e-commerce growth, which has halted. Amazon appears to have started AI slowly. In September, it joined Alphabet in investing billions in Anthropic AI, seemingly to make up for its prior lack of plan.

Amazon is one of the "Magnificent Seven," the world's most valuable internet corporations. These seven drove most of the market's share price gain last year. Amazon's best breakthroughs may be behind it. CEO Andy Jassy appears to have prioritized revenue over exploration, which could weaken the company. For instance, its marketplace vendors are upset over new fees that spurred an FTC probe.

One cutting-edge technological business that could replace Amazon in the Magnificent Seven is Taiwan Semiconductor Manufacturing business (NYSE: TSM). Taiwan Semiconductor Manufacturing (TSMC) is the world's most important company. The world's largest chipmaker. It manufactures 55% of contract chips and 90% of the most advanced chips, and that share could rise.

Apple, Nvidia, Broadcom, Advanced Micro Devices, and Amazon use TSMC to make semiconductors, giving it market strength. No other company would likely impact the globe more if it shut down today. TSMC's findings show its market dominance. In the fourth quarter, the corporation earned $8.2 billion on $19.6 billion in revenue, resulting in a 42% operating margin, demonstrating its pricing power.

Nvidia uses TSMC to make cutting-edge GPUs and other devices for generative AI applications like ChatGPT. Demand for those chips is far outpacing supply, which should boost TSMC profitability. Chip output must increase, and TSMC plans new foundries in the U.S. and elsewhere. Several companies are having trouble expanding in the U.S., indicating that it will be difficult to increase chip production, especially advanced ones.

Why TSMC should join Magnificent Seven Unlike the Magnificent Seven, TSMC isn't American. It remains on the New York Stock Exchange. On March 11, its market cap was $721 billion, making it more valuable than Tesla and eligible for the group based on size.

The Magnificent Seven should include TSMC since it represents the future of technology. It will likely remain the leading supplier of AI chips and other smart CPUs. The stock is up 34% year to date because the company has returned to revenue growth after the last semiconductor industry cyclical slump and investors recognize its critical role in the AI supply chain.

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