TSMC Back in World's Top 10 Most Valuable Companies Amid AI Boom

Taiwan Semiconductor Manufacturing Company (TSMC) has once again secured its position among the world's 10 most valuable companies. This resurgence is fueled by the ongoing optimism surrounding artificial intelligence (AI) and its impact on the tech industry, propelling TSMC's stock to unprecedented levels.

According to a Bloomberg report, TSMC's stock experienced a significant rally last week, surging by 14%. This surge elevated the chipmaker's market capitalization to a record high. While an early trading dip of 2% on Monday (March 11) slightly reduced the gains, the company still boasts a market capitalization of $634 billion.

The report further highlights that this minor decline has not significantly impacted the company's overall standing, as its market share remains higher than that of Broadcom.

Analysts Weigh In

Experts from Morgan Stanley and JPMorgan Chase & Co. anticipate further growth for the semiconductor giant, whose clientele includes industry leaders like Apple, Nvidia, and Qualcomm. This optimistic outlook is driven by the increasing revenue generated from AI-related applications and the company's robust pricing power.

Charlie Chan and other Morgan Stanley analysts noted last week that "Generative AI semi is an obvious growth driver for TSMC". They also emphasized that the company's international expansion efforts contribute to mitigating geopolitical concerns.

The numbers speak for themselves: TSMC's revenue increased by 9.4% in the first two months of 2024. This growth is attributed to heightened demand for high-end chips, spurred by the surge in AI-related activities.

Nvidia's 'AI Boost'

Nvidia has also experienced a significant stock upswing this year, riding the wave of enthusiasm surrounding generative AI.

Over the past month, Nvidia's stock price has climbed by more than 20%. The gains are even more pronounced when considering the last six months, with a rise of over 90%. Looking at the past year, Nvidia's stock price has skyrocketed from $234.36 per share to $875.28 per share, marking an impressive increase of 275%.