AI Chip Stocks Rally on TSMC’s Strong Earnings, Signaling Sustained Demand

Semiconductor stocks surged Thursday after Taiwan Semiconductor Manufacturing Co. reported record quarterly profits, underscoring the structural demand for AI-related chips. TSMC's net income of NT$325.3 billion ($10.1 billion) exceeded analyst expectations, sending its shares to all-time highs and lifting peers across the sector.

Nvidia gained 1.2%, Marvell Technology ROSE 1.3%, and Broadcom climbed 2.4% as the earnings validated the AI investment thesis. "This isn't just a transient spike," said AvaTrade's Kate Leaman. "TSMC's blowout quarter tells a clear story - we're seeing structural growth, not cyclical."

While Nvidia remains down 5% weekly, the report triggered a swift rebound. HSBC upgraded the stock to Buy, citing resilient earnings potential. Intel briefly jumped 2% before settling at $36. TSMC CEO C.C. Wei affirmed the momentum: "Our conviction in the AI mega trend is strengthening through 2026."

The rally extends October's AI sector gains following OpenAI's $500 billion valuation milestone. Market participants now view semiconductor demand as fundamentally re-rated rather than temporarily elevated.