Semiconductor stocks experienced a surge of more than 2 percent on Thursday, driven by strong demand for high-end chips used in artificial intelligence (AI). Taiwan Semiconductor Manufacturing, the world’s largest contract semiconductor maker, reported robust demand for AI chips and forecasted over 20 percent growth in 2024 revenue. The company’s U.S.-listed shares rose by 7.2 percent, making them the highest percentage gainer on the semiconductor index.
The semiconductor index had already risen by 65 percent in 2023, reaching an all-time intraday high on December 28. This growth has been attributed to increasing optimism surrounding the demand for AI. As Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, highlights, the AI sector is poised for significant revenue growth, leading to favorable prospects for many semiconductor companies. Ghriskey believes that we are still in the early stages of a technological revolution.
Nvidia, the world’s most valuable chipmaker, also experienced a surge in its shares on January 8 after unveiling new desktop graphics processors that integrate AI capabilities. Nvidia is widely recognized as a leading supplier of processors used in AI computing. The company’s shares have continued to rise and were up approximately 1 percent at the time of reporting. In 2023, Nvidia’s stock more than tripled, and it has already gained about 14 percent since the start of this year.
The growing demand for high-end chips used in AI is driving the positive performance of semiconductor stocks. As companies continue to invest in AI technology, the demand for specialized chips is expected to further increase in the coming years. With the ongoing technological revolution, the AI industry is set to experience substantial growth, presenting significant opportunities for semiconductor companies.
With these developments, the semiconductor sector has attracted attention from investors and analysts alike. The positive outlook for revenue growth in the AI market has contributed to the overall market optimism. As the AI industry continues to evolve, it is expected to have a transformative impact across various sectors, further fueling the demand for high-end chips.
In conclusion, the strong demand for high-end chips used in artificial intelligence is driving a surge in semiconductor stocks. Taiwan Semiconductor Manufacturing’s positive forecast for revenue growth and Nvidia’s strong market position in AI computing have bolstered investor confidence. As the AI industry continues to expand and with the prospect of a technological revolution on the horizon, semiconductor companies are well-positioned for significant revenue growth in the years to come.
