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Chip stocks jumped on Thursday as Nvidia’s (NVDA) chip manufacturer TSMC (TSM) gave financial forecasts that signaled strong demand for AI and its CEO dismissed bubble fears.<\/p>\n
Following the release of its fourth quarter results \u2014 which outperformed Wall Street\u2019s expectations on the top and bottom lines \u2014 TSMC executives said the Taiwan-based manufacturer is set to see AI-related revenue grow at a compounded annual rate (CAGR) in the high-50% range through 2029. Crucially, the company is stepping up its capital expenditures in 2026, forecasting $54 billion in capex for the year at the midpoint of its range, up from about $41 billion in 2025, as its CEO noted “very positive” developments in the AI market.<\/p>\n
\u201cWe are preparing to increase our capacity and stepping [up] our capex investment to support our customers’ future growth,\u201d TSMC chief executive C.C. Wei said in a call with analysts following the results.<\/p>\n
\u201cOur conviction in the multiyear AI megatrend remains strong, and we believe the demand for semiconductor[s] will continue to be very fundamental.\u201d<\/p>\n
Nvidia stock rose nearly 2% to erase the previous day\u2019s loss. Rival chipmaker AMD (AMD) also climbed 2%, while Broadcom (AVGO) and Micron (MU) edged up 1%. Amazon (AMZN) and Meta (META) nudged up fractionally.<\/p>\n
TSMC stock itself was up more than 4%.<\/p>\n
Asked explicitly whether stocks are in an AI bubble, Wei contended that the issue made him \u201cvery nervous.\u201d So the executive said he spent the past three to four months talking to his customers (chip designers) and their end customers to understand whether AI demand is real or not, as a debate rages on Wall Street about whether the return on hundreds of billions worth of Big Tech investments in the tech will pay off.<\/p>\n
\u201cThey show[ed] me the evidence that AI really help[s] their business,\u201d Wei said, adding that \u201cAI is real \u2014 not only real, [but it] is starting to grow into our daily life.\u201d<\/p>\n
TSMC\u2019s first quarter sales outlook was $35.2 billion at the midpoint, above the $33.2 billion projected by analysts tracked by Bloomberg.<\/p>\n
Read more: <\/em>Live coverage of corporate earnings<\/em><\/p>\n The manufacturer\u2019s strong results and guidance provide a hint at what investors can expect from upcoming Big Tech earnings. TSMC\u2019s largest customers include Apple (AAPL), Nvidia, Qualcomm (QCOM), AMD, Broadcom, and Amazon. Nvidia alone accounts for 13% of the company\u2019s revenue, according to Bloomberg data.<\/p>\n TSMC\u2019s results \u201cnecessarily imply strong continued orders\u201d for chip designers like Nvidia and Broadcom, Wedbush analyst Matthew Bryson wrote in a note to clients Thursday.<\/p>\n<\/p><\/div>\n