According to a report by Bloomberg, TSMC’s stock rallied 14% last week, elevating the chipmaker’s market capitalisation to a record, before a 2% decline in early trading on Monday (March 11), pared it to $634 billion.
However, the decline didn’t impact the company much as it still has a market share higher than that of Broadcom, the report noted.
What analysts have to say
Analysts from Morgan Stanley and JPMorgan Chase & Co. expect the semiconductor giant – that has Apple, Nvidia and Qualcomm as its customers – to advance further amid surging AI-related revenue and strong pricing power.
“Generative AI semi is an obvious growth driver for TSMC,” Morgan Stanley analysts including Charlie Chan wrote in a note last week. The company’s overseas expansion also helps mitigate geopolitical concerns, they said.
TSMC’s revenue gained 9.4% in the first two months of 2024 as demand for high-end chips increased due to a wave of activity in AI.
Nvidia gets ‘AI boost’
This is not the first time this year that a chip company has seen its stock on an upward spiral. This year, Nvidia was among the companies that got a boost by a frenzy around generative AI.
In the last month, Nvidia stock price has risen over 20% while in the last six months, it has risen over 90%. Moreover, in the last one year, Nvidia stock price has appreciated from $234.36 per share level to $875.28 per share mark – registering a 275% jump.