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Latest earnings results and commentary from the world’s largest third-party chipmaker gave a big boost to semiconductor stocks Thursday, including Apple and artificial intelligence leader Nvidia. Taiwan Semiconductor Manufacturing Company, whose customers include Apple, Nvidia and fellow club member Broadcom, said its fourth-quarter revenue from smartphone chips grew 27% more than expected on a quarterly basis. AAPL 1Y Mountain Apple 1 Year This is a positive development for the iPhone maker as demand for its latest models is questioned. Apple still uses his Qualcomm modem, but designs its own processors for smartphones and computers. TSMC then manufactures them for his Apple. Apple shares rose more than 3% on Thursday, with gains also factored in after Bank of America upgraded the stock from a hold-equivalent rating to buy. Apple stock got off to a tough start in 2024 amid a series of analyst downgrades. The stock was still down 2% heading into 2024 as of Thursday’s close, following a 48% surge last year. TSMC said it expects company-wide sales growth in 2024 to be in the low to mid-20s range, higher than the 20% growth rate expected by Wall Street analysts. TSMC’s division, which includes AI-focused processors, will have the highest growth rate in 2024, management said. This is a positive sign for club name Nvidia, which dominates the market for chips used to train AI models like those that power ChatGPT. “Let’s not overthink it. The two most obvious beneficiaries of TSMC’s performance are Apple and Nvidia,” Jim Cramer said Thursday. After tripling last year, Nvidia stock started 2024 sluggishly but is up more than 15% this month, including a nearly 2% gain on Thursday. NVDA 1Y Mountain Nvidia 1 Year TSMC also expects demand for AI chips to increase in the coming years, with the product expected to account for “high 10 percent” of the company’s revenue by 2027, up from about 6 percent now. I predict that it will be. TSMC previously said that AI chips are expected to account for “low 10%” of its sales. In addition to Nvidia, TSMC’s comments on AI chips also benefit the club, which helps Google parent Alphabet develop AI processors and owns Broadcom, a networking business that could benefit from the proliferation of AI workloads. Be positive. Broadcom stock closed Thursday near its all-time high set in mid-December. AVGO 1Y Mountain Broadcom 1 Year Also noteworthy is Bullpen member and former club stock Advanced His Micro Devices. The company is making its first meaningful foray into the data center AI chip market this year. TSMC manufactures AMD’s chip known as MI300X. AMD stock hit a new all-time high on Thursday. TSMC’s results and guidance on Thursday provided so-called “read-through” on its customers, many of which are club stocks such as Apple, Nvidia and Broadcom. TSMC is by far the world’s largest advanced semiconductor foundry, manufacturing chips on behalf of other companies that design them. In addition to AI and smartphones, TSMC taps into a wide range of end markets, including automobiles and other consumer electronics. This made the company a leader in the entire semiconductor industry. In a note to clients on Thursday, Goldman Sachs chip analysts said TSMC’s bullish stance on the AI market is “not surprising” but still supports their optimism on NVIDIA and AMD. Stated. Analysts at KeyBanc Capital Markets also said the results and comments are positive for Broadcom. TSMC’s results come as investors look for signs about the sustainability of the AI chip boom sparked by the viral ChatGPT launch in late 2022. After demand significantly outstripped supply last year, 2024 is set to be another strong year for AI chip sales as additional manufacturing capacity comes online to improve availability of Nvidia processors and new products from AMD arrive. The general consensus on Wall Street is that it will. But some on Wall Street are worried that orders for AI chips will start to slow in 2025, pushing the market into a so-called digestion phase. The focus on AI chips in 2023 may have obscured the fact that it was an overall tough year for the semiconductor market. This is evidenced by TSMC’s revenue decline of 8.7% for the year. Against that backdrop, TSMC’s confirmation that the industry is heading into a better 2024 may be taken somewhat positively by a pair of non-club tech stocks. LIN 1Y Mountain Linde 1 Year Industrial gas supplier Linde and specialty chemical company DuPont are both club stocks and have exposure to the electronics industry. Linde will remain mostly flat in 2024, only about 4% off its all-time high reached in mid-December. DuPont is down about 4.5% in 2024, but only needs to rise about 7% to reach its 52-week high in July. For the three months ended September 30, electronics accounted for about 8% of Linde’s sales. However, this end market has been a bit tough for the company recently, with sales declining for three consecutive quarters. DD 1Y Mountain DuPont 1 Year Similarly, weakness in the semiconductor industry has weighed on DuPont’s overall results in recent quarters. An expected return to growth in the chip market is part of our investment thesis for DuPont, which he added to the portfolio in August. During DuPont’s third-quarter earnings conference, management said the company experienced “extraordinary growth with TSMC” as the foundry giant worked to expand production of cutting-edge chips. DuPont said its exposure to the chip market is skewed toward advanced chips. On Thursday, TSMC said it expects revenue from the most advanced manufacturing process on the market, known as 3-nanometer, to more than triple in 2024. Perhaps that’s good news for DuPont as well. But what is certain is that we trimmed our position in DuPont on January 8th, trading the stock a few dollars above current levels, due to concerns that China’s economic downturn could once again boost DuPont’s recovery forecasts. It was sold. (Jim Cramer’s charitable trusts are long AAPL, NVDA, AVGO; see here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investment Club, before Jim makes a trade Receive trading alerts. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in a charitable trust’s portfolio. If Jim talks about a stock on his CNBC TV, he will wait 72 hours before executing the trade after issuing a trade alert. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
TSMC headquarters in Hsinchu, Taiwan. Products from semiconductor manufacturers are at the heart of everything from cars to smartphones.
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Latest financial results and comments from the world’s largest third-party chipmaker provided a major boost Thursday. apple Semiconductor stocks including artificial intelligence leaders Nvidia.
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