Middle Coast Investing, an investment advisor firm, released its first-quarter investor letter. A copy of the letter can be downloaded here. Middle Coast Investing had a difficult but manageable first quarter, but everyone has suffered since the Liberation Day crash at the beginning of the second quarter. To manage the volatility, the firm decided to increase cash goal levels by roughly 5% for each portfolio. In the quarter, the firm sold 3% more than it bought. In Q1 2025, the US Portfolios returned -3.7% compared to -4.6% for the S&P 500. It’s Core U.S. portfolios returned -0.7% while Russell 2000 returned -9.8%, S&P 600 returned -9.3% and Nasdaq generated -10.4% for the same period. However, its European Portfolios appreciated by 9.2%. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first quarter 2025 investor letter, Middle Coast Investing emphasized stocks such as Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) manufactures, packages, tests, and sells integrated circuits and other semiconductor devices. The one-month return Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was -9.46%, and its shares gained 13.16% of their value over the last 52 weeks. On April 15, 2025, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stock closed at $157.33 per share with a market capitalization of $700.02 billion.

Middle Coast Investing stated the following regarding Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q1 2025 investor letter:

"Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the company we own with the most obvious geopolitical risk, and we cut our position in half. I know that if Taiwan-China flares up the damage will extend much wider, but TSM would seem to be the first domino there. And it’s not as if Taiwan is having an easy time of it with the current U.S. administration."

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

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is in 9th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 186 hedge fund portfolios held Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) at the end of the fourth quarter compared to 158 in the third quarter. The fourth quarter revenue of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) increased 14.3% sequentially in NT. While we acknowledge the potential of Taiwan Semiconductor Manufacturing Company Limited (NYSE: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 timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We covered Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in another article, where we shared the list of AI stocks you shouldn’t overlook. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

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