We recently published a list of Billionaire Steve Cohen’s 10 Large-Cap Stock Picks With Huge Upside Potential. In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands against other billionaire Steve Cohen’s large-cap stock picks with huge upside potential.

What does the future hold for the US economy and equities amid punitive tariffs, immigration crackdown and federal spending cuts? That’s the million-dollar question as the chairman and CEO of hedge fund Point72 Asset Management, Steve Cohen, sounds alarm bells warning the US economy could be on the brink amid macroeconomic uncertainties.

The billionaire investor has fired a warning shots, insisting that President Donald Trump’s aggressive trade policy could cause the economy to grow at a much slower rate of 1.5% in the second half of the year, down from an initial growth forecast of 2.5%. The warning comes on Trump touting tariffs for various purposes, including lowering trade imbalances and gaining more negotiating power over other nations. Nevertheless, their negative impact continues as the service sector, a key economic driver, grows slowly from 2023.

READ ALSO: Billionaire Prem Watsa’s 10 Stock Picks With Highest Potential and 15 Recent Activist Investor Campaigns.

“Tariffs cannot be positive, okay? I mean, it’s a tax,” Cohen said Friday at the FII Priority Summit in Miami Beach, Florida. “On top of that, we have slowing immigration, which means the labor force will not grow as rapidly as … the last five years and so.”

Cohen has warned that the good times that saw the equity market trickle to record highs are over as the US economy’s outlook is uncertain due to the tariff plan laid out by Trump. True to Cohen’s warnings, the US stock market has pulled back significantly from record highs. Given the uncertain macro environment, the S&P 500 is already down by about 8% for the year and on the cusp of entering the correcting phase.

Echoing similar sentiments is Morgan Stanley CIO Mike Wilson, who insists a significant correction has been on the cards since 2023. According to Wilson, investors had pushed stocks upwards, with valuation skyrocketing above historical norms and beyond the value of their fundamentals. Therefore, a rapid descent should be expected as headwinds soar left, right and centre.

“I’m actually pretty negative for the first time in a while,” Cohen said. “It may only last a year or so, but it’s definitely a period where I think the best gains have been had and wouldn’t surprise me to see a significant correction.”

On the other hand, Cohen remains optimistic about the artificial intelligence outlook despite DeepSeek’s revelation and development on the development of cost-effective AI models rattling the US markets. According to Cohen, DeepSeek’s development of cost-effective AI models is positive despite raising concerns about spending on powerful AI chips developed by US companies.

Cohen is one of the billionaire investors taking advantage of the artificial intelligence boom through strategic investments. His portfolio at Point72 Asset Management hedge boasts significant exposure to tech giants developing and leveraging various AI innovations. Likewise, Point72 Asset Management has already unveiled a new artificial intelligence-focused fund that posted a 14% gain in the last three months of 2024 growing to $1.5 billion.

Our Methodology

We combed Point 72 SEC Q4 2024 13F filings to identify billionaire Steve Cohen’s 10 large-cap stock picks with huge upside potential. We focused on stocks with a market cap of more than $40 billion with significant upside potential. We then analyzed the stocks on why they stand out as solid investments well poised to generate significant value even on the overall equity market turning bearish. Finally, we listed the stocks in ascending order of upside potential.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A close-up of a complex network of integrated circuits used in logic semiconductors.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)

Market Cap as of April 24: $679.95 Billion

Point72 Asset Management’s Equity Stake: $492.72 Million

Analysts’ Upside Potential as of April 24: 39.05%

Number of Hedge Fund Holders: 186

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the world’s largest semiconductor foundry, focusing on chip manufacturing for other companies. Its products are used in a wide variety of applications, including high-performance computing, smartphones, the Internet of Things (IoT), automotive, and digital consumer electronics. While the stock has pulled back significantly, Barclays maintains an Overweight rating, having cut the price target to $215 from $255, concerned by a slowdown in the chip industry.

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) delivered solid first-quarter 2025 results ahead of new US tariffs that have significantly affected the chip industry. Its profit jumped 60% to NT$361.56 billion or $11.16 billion, beating consensus estimates of NT$351.65 billion. Revenue was also up 42% to NT$839.25 billion.

The better-than-expected results come from Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) cashing in on the growing demand for artificial intelligence technology. While the company faces the risk of being hit by 100% tax if it does not shift more US production, it has reiterated its full-year outlook. It expects revenue growth to be in the mid-20% range of continued AI development. The company expects its business in 2025 to be supported by strong growth in its 3-nanometer and 5-nanometer technologies.

Overall, TSM ranks 7th on our list of billionaire Steve Cohen’s large-cap stock picks with huge upside potential. While we acknowledge the potential of TSM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings check out our report about this cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.