Chip Stocks Surge After TSMC Profit Soars 39%, Fueled by AI Demand

• Taiwan Semiconductor Manufacturing Co. (TSM) reported a record 39.1% year-over-year increase in third-quarter profit, exceeding estimates and raising annual revenue guidance amid strong AI chip demand from clients like Nvidia (NVDA) and Apple (AAPL).
• Major AI sector deals included a $40 billion BlackRock-led acquisition of Aligned Data Centers and a OpenAI-Broadcom (AVGO) pact for 10 gigawatts of custom chips, equivalent to powering over 8 million U.S. households, highlighting sustained infrastructure investment.
• Semiconductor stocks reacted positively, with Micron Technology (MU) surging 4% to a 52-week high of $202.00, Nvidia up 1.20% to $182, Marvell Technology (MRVL) gaining 1.3% to $91, and Broadcom advancing 2.3% to $359, while Samsung Electronics gained nearly 3%.

Semiconductor stocks demonstrated notable resilience and upward momentum on Thursday, propelled by Taiwan Semiconductor Manufacturing Co. (TSM)’s optimistic outlook on artificial intelligence infrastructure demand. This surge underscores a deepening structural shift in the industry, where sustained investment in AI hardware continues to outpace traditional cyclical patterns. TSMC’s third-quarter profit climbed 39.1% year-over-year, surpassing analyst expectations and establishing a new quarterly record, driven primarily by unrelenting orders for advanced chips essential to AI applications.

The company’s elevated annual revenue guidance further signals confidence in ongoing partnerships with key clients such as Nvidia Corp. (NVDA) and Apple Inc. (AAPL), whose reliance on TSMC’s cutting-edge fabrication capabilities remains pivotal. As the world’s leading foundry, TSMC’s dominance in producing chips at 3nm and below positions it at the core of AI’s computational backbone, enabling the high-performance silicon that powers everything from data center accelerators to edge devices. This performance not only validates the sector’s trajectory but also highlights how AI’s expansion is embedding semiconductors into a broader ecosystem of intelligent systems, far beyond initial hype.

Complementing TSMC’s results, the week featured transformative transactions that amplify the scale of AI infrastructure buildouts. A BlackRock-led consortium’s $40 billion acquisition of data-center operator Aligned Data Centers exemplifies the capital influx targeting energy-efficient facilities optimized for AI workloads. In parallel, a collaboration between OpenAI and Broadcom Inc. (AVGO) aims to develop 10 gigawatts of custom silicon, a capacity equivalent to powering over 8 million U.S. households and indicative of the voracious energy demands of next-generation AI training clusters.

These moves reinforce the enduring “picks and shovels” dynamic in AI, where foundational providers of compute and memory reap benefits from the frenzy among hyperscalers and innovators. Nearly three years post-ChatGPT’s introduction, the race to achieve systems rivaling human cognition has evolved into a multi-trillion-dollar infrastructure imperative, with semiconductors serving as the indispensable enablers. Wall Street’s focus on these enablers persists, as evidenced by the selective outperformance among chip designers and fabricators amid broader market volatility.

Market reactions reflected this enthusiasm selectively. Micron Technology Inc. (MU) shares advanced approximately 4% to a 52-week peak of $202.00, building on a robust 2025 uptrend fueled by constrained supplies of high-bandwidth memory critical for AI servers. Samsung Electronics ended nearly 3% higher on the South Korean exchange. Among AI-centric designers, Nvidia Corp. (NVDA) edged up 1.20% to $182, Marvell Technology Inc. (MRVL) rose 1.3% to $91, and Broadcom Inc. (AVGO) advanced 2.3% to $359.

As articulated by AvaTrade chief market analyst Kate Leaman, TSMC’s results affirm that this momentum transcends temporary fluctuations, embedding AI-driven demand as a permanent fixture in semiconductor economics. Investors appear poised to monitor how these tailwinds – bolstered by geopolitical stability in supply chains and advancements in chiplet architectures – will shape quarterly trajectories into year-end.

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