Chip Stocks Rally After TSMC Lifts 2025 Outlook And Fuels AI Hopes

Oct 17 - Taiwan Semiconductor Manufacturing Company TSM lifted sentiment across the chip sector after reporting a stronger-than-expected quarter and nudging up its 2025 outlook.

TSM said third-quarter revenue rose to NT$989.9 billion, with net income near NT$452.3 billion. The foundry said 3-nanometer chips accounted for about 23% of wafer sales, while nodes 7 nm and below made up roughly 74% of revenue.

The company raised its 2025 revenue-growth target to the mid-30% range and reaffirmed capital spending of up to $42 billion. It also guided fourth-quarter revenue to about $32.2 billion to $33.4 billion.

The upbeat outlook and a string of AI infrastructure deals helped lift major suppliers. Nvidia Corporation (NVDA) rose about 1%, Broadcom AVGO climbed about 2% and Micron Technology (MU) jumped about 4% on the news on Thursday.

Analysts said the print reinforces expectations of sustained AI-driven spending on advanced process capacity. UBS and Citi raised price targets on Micron, citing stronger demand and improving pricing for high-bandwidth memory, a key component for AI accelerators.

Reports that major cloud players plan large Nvidia GPU deployments added momentum, underscoring a broader push to expand AI compute capacity