Shares of Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest third-party chipmaker and a major supplier of chips to Nvidia and Apple, rose on Wednesday after the company reported a surge in sales.
Taiwan Semiconductor
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American Depositary Receipts rose 1.5% to $187.39 at the open. At the start of trading, American Depositary Receipts had risen 77% this year.
The sales show that demand remains strong for high-performance chips that run artificial intelligence software.Taiwan Semiconductor dominates the market for making high-end chips, including the 3-nanometer and 2-nanometer chips expected to power next-generation smartphones.
The Taiwan Semiconductor news boosted shares of other chip and tech stocks. Nvidia shares rose 1.5% to $133.28 in premarket trading, while Apple rose 0.9% to $230.79. Advanced Micro Devices rose 1.4%.
The move looks like a return to tech hardware stocks after a strong showing for software stocks in June, said Jordan Klein, an analyst at Mizuho Securities.
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“What I’ve learned about investor sentiment and AI investing in 2024 is that this is FOMO [fear of missing out] “The market is AI-driven… so when they see something outperform or get better because of AI-related capital spending, money rushes in to buy and stocks are quickly re-priced,” Klein wrote.
Taiwan Semicon said its June sales rose 33 percent from a year earlier to NT$207.87 billion ($6.38 billion), and its second-quarter sales rose 40 percent to NT$673.51 billion ($20.68 billion).
Second-quarter sales exceeded the company’s latest sales forecast of $19.6 billion to $20.4 billion. Taiwan Semicon is scheduled to officially announce its second-quarter results on July 18, when it forecasts an operating margin of 40% to 42%.
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The company didn’t break out its revenue, but Wedbush analyst Matt Bryson said the growth was likely driven by demand for servers.
“The reason we are increasing our price assumption for 2026 is because we believe prices will be slightly higher. This improvement, combined with HPC expectations, [high-performance computing] “Demand continues to remain strong, leading us to raise our 2025 revenue, margin and EPS guidance,” Bryson said.
Bryson raised his target price for Taiwan-listed Taiwan Semicon shares to NT$1,175 from NT$900 previously. The Taipei-listed stock closed 0.5 percent higher at NT$1,054 on Wednesday.
Contact Adam Clark at adam.clark@barrons.com and Brian Swint at brian.swint@barrons.com.
