Nvidia, chip stocks rally after TSMC's blowout earnings

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Nvidia, chip stocks rally after TSMC's blowout earnings

TSMC reported a 54% increase in net profit, as global chipmakers continue to benefit from demand driven by AI applications.

In a statement, TSMC said that in the third quarter, “our business was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies,” referencing its semiconductor nodes. TSMC now expects its capital expenditure for this year to increase to slightly more than $30 billion, as mentioned during the earnings call. The firm's capital expenditures rose to $6.4 billion in the third quarter, up from $6.36 billion in the previous three months.

The company’s solid Q3 print has helped improve investor sentiment following recent disappointing guidance and results by European chipmaker ASML (AS:“The fact that ASML guided so low put some doubt into investors as to whether or not this AI demand is as big as everyone is predicting. And it puts a spotlight on guidance for every other semiconductor company that reports moving forward,” Marino commented.

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