With regards to investing in synthetic intelligence (AI), it might appear to be Nvidia is the primary focus of buyers. The corporate has muscled its means into the “Magnificent Seven” because it claims between 80% and 95% of the AI chip market.Nonetheless, Nvidia has additionally grown to a price-to-sales (P/S) ratio of 36, main some to query whether or not that inventory has develop into overvalued. Traders might wish to look to different AI shares, and two maintain the potential to ship outsize investor returns.1. Taiwan SemiconductorInvestors might should look no additional than Nvidia’s producer, Taiwan Semiconductor Manufacturing (TSMC) (NYSE: TSM). Because the main producer of the world’s most superior chips, TSMC makes Nvidia’s success potential. Moreover, it’s the main producer of chips for corporations like Apple and AMD and has even attracted enterprise from an rising competitor in its trade, Intel.Because of this e book of enterprise, TSMC claimed 61% of the third-party foundry market within the fourth quarter of 2023, in response to TrendForce.Admittedly, amid geopolitical tensions on its house island of Taiwan, many buyers, together with Warren Buffett, have proven reluctance to spend money on TSMC inventory. Nonetheless, the corporate has mitigated this by constructing extra fabs exterior of Taiwan. Furthermore, a supply of geopolitical stress, China, is determined by TSMC’s chips, decreasing the chance that it will put its provide chain in danger.The corporate additionally appears to be recovering from the latest downturn within the chip market. Income of $69 billion fell 5% from year-ago ranges. That led to a complete internet earnings of $27 billion, 22% lower than year-ago ranges.Nonetheless, analysts forecast a 22% enhance in income this yr and an extra 20% rise the next yr. Such optimism took the inventory value 55% increased over the past yr.Consequently, it now sells at a P/E ratio of about 26. Whereas that isn’t low for this firm, it compares favorably to earnings multiples for different chip shares. And as demand from corporations like Nvidia results in rising manufacturing, TSMC inventory will seemingly proceed on its increased trajectory.Story continues2. MicronAI has additionally modified the sport for an additional chip producer, Micron Applied sciences (NASDAQ: MU). Micron produces the reminiscence chips that assist drive the AI revolution. Certainly, the reminiscence chip trade has traditionally skilled extra volatility than its counterparts that produce CPUs and GPUs. This led to no internet positive aspects within the inventory between the mid Nineties and mid 2010s.MU ChartNonetheless, the secular bull market in AI chips has modified the sport for this inventory, resulting in a steady rise in demand for reminiscence chips. Consequently, the inventory gained 140% over the past 5 years, beating the S&P 500’s complete return and resulting in Micron changing into a dividend inventory.Within the first quarter of fiscal 2024 (ended Nov. 30, 2023), income of $4.7 billion rose 16% yearly. This indicators a restoration within the reminiscence market, as Micron’s income declined 49% in fiscal 2023. Amid the struggles, the fiscal Q1 internet loss was $1.2 billion, which improved from the $1.4 billion loss within the year-ago quarter.Nonetheless, analyst forecasts name for a 34% enhance in income in fiscal 2024 and a 42% rise within the following fiscal yr. This might stoke a dramatic restoration that returns Micron to profitability as quickly as this fiscal yr.Traders are optimistic, a lot in order that they’ve bid the P/S ratio to round 7, the very best gross sales a number of for the reason that early 2000s, because the inventory sells close to all-time highs. Because the AI revolution continues, the rising want for reminiscence chips and growing income seemingly means Micron inventory will keep on an upward trajectory.Must you make investments $1,000 in Taiwan Semiconductor Manufacturing proper now?Before you purchase inventory in Taiwan Semiconductor Manufacturing, think about this:The Motley Idiot Inventory Advisor analyst staff simply recognized what they consider are the 10 greatest shares for buyers to purchase now… and Taiwan Semiconductor Manufacturing wasn’t considered one of them. The ten shares that made the lower might produce monster returns within the coming years.Inventory Advisor supplies buyers with an easy-to-follow blueprint for fulfillment, together with steering on constructing a portfolio, common updates from analysts, and two new inventory picks every month. The Inventory Advisor service has greater than tripled the return of S&P 500 since 2002*.See the ten shares*Inventory Advisor returns as of March 21, 2024Will Healy has positions in Superior Micro Gadgets and Intel. The Motley Idiot has positions in and recommends Superior Micro Gadgets, Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Idiot recommends Intel and recommends the next choices: lengthy January 2023 $57.50 calls on Intel, lengthy January 2025 $45 calls on Intel, and brief Might 2024 $47 calls on Intel. The Motley Idiot has a disclosure coverage.Overlook Nvidia: 2 Synthetic Intelligence (AI) Shares to Purchase As a substitute was initially revealed by The Motley Idiot