Major chip stocks advanced sharply in Wednesday’s premarket session, with Intel gaining 4% and the Shares Semiconductor ETF (SOXX) climbing 2.6%
- TSMC makes cutting-edge semiconductors for the likes of Nvidia and Advanced Micro Devices, and the biggest buyers of those chips have set aside a record capital expenditure this year.
- Last week, the Taiwanese contract chipmaker reported a 30% increase in May revenue to NT$416.98 billion ($13.2 billion).
- Vice President Lipen Yuan bought 1,000 TSMC shares for about $75,260, according to a filing on Tuesday.
U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. rose 2% in premarket trading on Wednesday, joining a broader rebound across chip stocks and bringing the world’s largest contract chipmaker within striking distance of a $2 trillion market capitalization.
Major chip stocks advanced sharply in the session, with Intel gaining 4% and the Shares Semiconductor ETF (SOXX) climbing 2.6%, extending gains fueled by optimism over a potential U.S.-Iran peace deal, despite a brief pause in momentum the previous session.
TSMC makes cutting-edge semiconductors for the likes of Nvidia and Advanced Micro Devices. The biggest buyers of those chips – including cloud companies Alphabet, Amazon, and Microsoft – have set aside $725 billion for AI-related investments this year.
In April, the Taiwanese giant raised its full-year sales guidance and said its capital spending should trend toward the upper end of an existing forecast range of as much as $56 billion in 2026.
The TSM stock has gained 41% year to year. Based on the closing price, the company’s market cap hit a peak of $1.99 trillion on June 2, according to TradingView.
Recent Catalysts For TSMC
New filing from the company on Tuesday showed that Vice President Lipen Yuan bought 1,000 TSMC shares for about $75,260, increasing his direct holdings to 4,000 shares.
Last week, TSMC issued its monthly update. Revenue in May increased 30% to NT$416.98 billion ($13.2 billion), with combined April and May sales up around 24% from a year ago, according to Bloomberg calculations.
Analysts expect sales growth of 35% in the second quarter, which ends in June, according to estimates from Koyfin.
The latest performance shows steady demand for advanced chips, which power data centers and other systems that power AI applications, smartphones and automobiles.
Last month, Nvidia CEO Jensen Huang announced that the U.S. chip designer would set up a headquarters in Taiwan and invest up to $150 billion annually in the region.
Retail View On TSMC
On Stocktwits, the retail sentiment for TSMC remained ‘extremely bearish,’ unchanged from the previous day.
“$TSM looking shaky despite that 30% YoY May revenue growth and raised guidance. Big money is piling into puts with over $9m in downside premium bought today… Feels like a big caution sign for anyone thinking about short-term upside plays,” a trader wrote, while some also said they were loading shares with a long term view.
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