TSMC Recaptures Top 10 Valuation Spot as AI Demand Fuels Stock Rally

Taiwan Semiconductor Manufacturing Company (TSMC) has once again secured its position among the world's ten most valuable companies. This resurgence is fueled by the prevailing optimism surrounding artificial intelligence (AI) within the tech industry, which has propelled its stock to unprecedented heights.

According to a Bloomberg report, TSMC's stock experienced a remarkable 14% rally last week. This surge elevated the chipmaker's market capitalization to a record level. However, an early trading dip of 2% on Monday (March 11) slightly reduced it to $634 billion. Despite this minor setback, the report emphasizes that the company's market share remains higher than that of Broadcom.

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

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

TSMC's revenue witnessed a substantial 9.4% increase in the first two months of 2024. This growth is attributed to the heightened demand for high-end chips, spurred by the wave of activity in the AI sector.

Nvidia's 'AI Boost'

Nvidia has also experienced a significant stock surge this year due to the generative AI frenzy.

Over the past month, Nvidia's stock price has increased by over 20%. The price has risen over 90% in the last six months. Over the past year, Nvidia's stock price has jumped from $234.36 per share to $875.28 per share, a 275% increase.