TSMC Regains Spot Among World's Most Valuable Amid AI Chip Demand Surge

Taiwan Semiconductor Manufacturing Company (TSMC) has surged back into the ranks of the world's top 10 most valuable companies. This resurgence is fueled by the current wave of optimism surrounding artificial intelligence (AI) within the tech industry, propelling its stock to unprecedented levels.

According to a Bloomberg report, TSMC shares experienced a significant rally last week, climbing by 14%. This surge elevated the chipmaker's market capitalization to a record high. However, a slight dip of 2% in early trading on Monday, March 11th, brought it down to $634 billion. Despite this minor setback, the report indicates that the company maintains a higher market share than Broadcom.

Analysts' Perspectives

Analysts at Morgan Stanley and JPMorgan Chase & Co. anticipate further gains for the semiconductor giant, which counts Apple, Nvidia, and Qualcomm among its clientele. This positive outlook is attributed to surging AI-related revenue and the company's strong pricing power.

"Generative AI semi is an obvious growth driver for TSMC," wrote Morgan Stanley analysts, including Charlie Chan, in a recent note. They also highlighted that the company's international expansion efforts are helping to alleviate geopolitical concerns.

The numbers reflect this growth. TSMC's revenue saw a 9.4% increase in the first two months of 2024, driven by rising demand for high-end chips due to the surge in AI activity.

Nvidia's "AI Boost"

TSMC isn't the only chip company experiencing a stock surge this year. Nvidia has also benefited significantly from the generative AI boom.

Over the past month, Nvidia's stock price has climbed over 20%, and in the last six months, it has risen by more than 90%. Looking back a year, Nvidia's stock has jumped from $234.36 per share to $875.28, marking an impressive 275% increase.