The booming demand for chips to power artificial intelligence (AI) applications has sent Nvidia's (NASDAQ: NVDA) stock soaring in 2023, with shares of the graphics card specialist jumping 206% this year. But that also means that Nvidia's stock now trades at an extremely expensive multiple.

Nvidia's price-to-sales ratio sits at 45 right now, way higher than the company's five-year average sales multiple of 18. The price-to-earnings ratio of 243 is way higher than the Nasdaq-100 index's multiple of 35. While there is a good chance that Nvidia could justify its expensive multiples with a sharp increase in revenue and earnings in the current fiscal year and beyond, investors with a lower risk appetite may not be comfortable buying the stock at its current multiples.

This is where semiconductor foundry specialist Taiwan Semiconductor Manufacturing (NYSE: TSM) -- popularly known as TSMC -- comes into play.

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Source Fool.com