NVIDIA Shares rose about 3% during trading on Thursday, rebounding from a 7% plunge the previous day as comments by U.S. presidential candidate Donald Trump sparked geopolitical concerns.
The rise of Nvidia TSMC TSMC said on Thursday that demand for the high-performance AI chips it makes for Nvidia remains high and supply remains constrained.
“I am also trying to balance supply and demand, but I can’t. Today, demand is very high and we have had to work very hard to meet customer demand,” Wei told analysts.
“Supply will remain tight through 2025,” TSMC Chairman CC Wei said on Thursday. The company on Thursday reported revenue and net profit that beat analysts’ expectations, and its shares fell less than 1%.
On Wednesday, the semiconductor sector suffered its worst day since 2020. Am, arm, Broadcom and Qualcomm Semiconductor stocks fell as comments by U.S. presidential candidate Donald Trump raised geopolitical concerns. Changes being considered US policy is not to defend Taiwan from a Chinese invasion without a quid pro quo, which would call into question Nvidia’s chip supplies.
“Amid growing concerns about geopolitical tensions ahead of the US presidential election, TSMC said it will continue to expand overseas to mitigate risks,” Citi analyst Laura Chen wrote in a note on Thursday. TSMC is currently building a massive chip factory in Arizona, funded in part by U.S. subsidies.
Other chipmakers are also still struggling. arm It decreased by 2%. Am It fell 2% Qualcomm It was flat. Super microcomputer, Shares of Amazon, a major server assembler for Nvidia, fell 2%.
Intel Increased by more than 1% Broadcom The stock price rose about 3% after reports that the company was in talks to produce AI chips for OpenAI.
Bloomberg said Wednesday that the Biden administration Further trade restrictions ASML, the Dutch company that makes semiconductor manufacturing equipment for TSMC, fell 1% after it gave a weak sales outlook for the current quarter on Thursday, sparking a slump over TSMC’s plans to ship the equipment to China.
Analysts at UBS wrote in a note on Thursday that while investors are reallocating gains from strong semiconductor stocks to other names, the sector could rally again once companies release comments later this year about how they are benefiting from their investments in AI chips. Nvidia shares have risen more than 150% so far in 2024.
“Following the semiconductor sector’s strong outperformance in the first half of the year, some investors have reallocated AI-related semiconductor exposure to large platform companies and unprofitable tech companies,” UBS analysts wrote in a note.