TSMC Reclaims Top 10 Most Valuable Companies Spot Amid AI Boom
Quick Look
- Taiwan Semiconductor Manufacturing Company (TSMC) has re-entered the top 10 most valuable companies globally, driven by the artificial intelligence (AI) boom.
- Its stock rallied, pushing market capitalization to a record high, surpassing Broadcom, with analysts expecting further growth.
AI-generated summary
Why It Matters
The artificial intelligence (AI) boom is driving increased demand for high-end chips, significantly boosting the revenue and market capitalization of semiconductor companies like TSMC and Nvidia.
Taiwan Semiconductor Manufacturing Company (TSMC) has reclaimed a spot in the list of the world’s 10 most valuable companies, riding the optimism of the artificial intelligence (AI) boom. TSMC's stock rallied, elevating its market capitalisation to a record, making it higher than Broadcom.
Analysts expect TSMC to further advance amid surging AI-related revenue and strong pricing power.
Taiwan Semiconductor Manufacturing Company ( TSMC ) has reclaimed a spot in the list of the world’s 10 most valuable companies, riding the optimism of the artificial intelligence (AI) boom in the tech industry that pushed its stock to record levels.
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.
What to Watch
AI outlook — possibilities, not facts
TSMC will further advance amid surging AI-related revenue and strong pricing power.
Likely · Within months
Open Questions
- What is the exact future revenue projection for TSMC from AI?
- How long will the current stock rally for chip companies continue?
- What specific geopolitical concerns are mitigated by TSMC's overseas expansion?
