The news should quell market concerns after disappointing results from fellow chipmaker ASML Holdings earlier this week
Taiwan Semiconductor stock (NYSE:TSM) surged in Thursday trading after the company reported a stunning 54% net profit increase thanks to soaring demand for chips used in artificial intelligence (AI).
Along with the announcement, the AI stock’s CEO C.C. Wei reassured investors of the artificial intelligence (AI) demand story, providing relief for the market after fellow chipmaker ASML (NASDAQ:ASML) revealed a downbeat 2025 sales outlook earlier this week.
In 2024’s third quarter, Taiwan Semiconductor’s revenue rose 36% year over year to $23.5 billion, while the company’s net profit increased 54% to $10.1 billion.
Furthermore, the firm’s operating margin increased 5% sequentially (quarter over quarter) to 47.5%, with around 30% year-on-year growth anticipated.
Previously, Taiwan Semiconductor’s management guided for current-quarter sales growth of slightly above the mid-20s percentage-wise. So, unless the company’s management is off-base in its outlook or there’s an unexpected negative event, the chipmaker could be on track for another quarter of outperformance.
AI demand is “real”
Aside from the impressive performance and jump in stock price, the earnings call commentary provided by CEO Wei also offered the reassurance that AI-tech stock investors were looking for.
Wei added: “The demand is real, and I believe it’s just the beginning of this demand, all right? As one of my key customers said, the demand right now is insane that it’s just a beginning. It’s a form of scientific engineering, ok? And it will continue for many years.”
Wei went on to note that “almost every AI innovator is working with TSMC”. One can safely assume that chipmaking juggernauts like NVIDIA (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) are included in this.
