Forecast: Potential Tech Stocks That May Generate High Returns

Article Title: Micron Technology and Taiwan Semiconductor Manufacturing (TSMC) Poised for Long-Term Growth in AI Sector

In the rapidly evolving world of technology, two names that stand out as potential multibaggers in the long run are Micron Technology and Taiwan Semiconductor Manufacturing (TSMC).

TSMC, a global leader in semiconductor manufacturing, is set to maintain its heavy capital spending, with an estimated investment of $38 billion to $42 billion in 2025. This significant investment is expected to dilute the company's gross margin due to high capex investments for the next five years. However, TSMC's focus on advanced process nodes, which accounted for almost 74% of its wafer sales in the second quarter, is a strategic move to stay competitive.

TSMC's A16 node is designed to improve energy efficiency for AI data centers, a crucial factor in today's tech-driven world. The company's second-quarter earnings reflect this focus, with a 60.7% climb in diluted earnings per share (EPS) and high-performance computing platforms accounting for 60% of its total revenue.

Meanwhile, Micron Technology, a key player in the memory market, has transformed from being a cyclical memory supplier to a company supporting the buildout of global AI infrastructure. The most critical driver for Micron's future growth is the explosive demand for high-bandwidth memory in complex AI applications and data centers.

Micron has made strides in this area, introducing LPDDR5X (a newer, faster, and more power-efficient DRAM) chips designed to power AI applications in AI PCs and smartphones. The company has also managed to ramp up HBM3E volumes faster than expected and has already sold off the 2026 HBM supply. Limited supply, coupled with deeper client engagement, could support stronger pricing power for Micron.

Micron's non-GAAP gross margins are expected to be in the range of 44% to 45%, and non-GAAP earnings per share are expected to fall between $2.78 and $2.92. In August 2025, Micron upgraded its guidance for the fourth quarter of its fiscal 2025, expecting revenue between $11.1 billion and $11.3 billion.

Despite potential risks such as potential pricing pressures for HBM3E due to increased supply from Samsung in 2026 and a partial ban in China since 2023, Micron's strong position in low-power DRAM, used in data centers, gives it an edge as hyperscalers strive for improved energy efficiency.

Investment guru Warren Buffett often advises investing in companies with "wide moats" that stand the test of time. With its strategic focus on advanced technologies such as data science, cloud computing, and artificial intelligence, both Micron Technology and TSMC appear to have such moats.

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TSMC, with a 70.2% share of the global foundry market, and Micron Technology, with its strategic focus on memory solutions for AI applications, are well-positioned to capitalise on the AI tailwinds, potentially boosting their valuations close to their historical five-year average of 22.2 times, making them promising investments for the long run.