Shares of Taiwan Semiconductor Manufacturing (NYSE: TSM) were moving higher today after the company reported strong sales results for April, showing it is starting off the second quarter with strong momentum.
As a result, TSMC stock was up 4.9% as of 12:02 pm ET.
The chip rebound is here
TSMC said revenue in April jumped 59.6% year over year to $7.3 billion. On a sequential basis, revenue was up 20.9% from March to April, and the company said revenue for the first four months of the year has increased 26.2%.
Taiwan Semi doesn’t provide commentary when it reports the monthly metrics, but the strong growth indicates that overall demand for chips continues to rebound after a lull in 2022 and 2023, and that demand for the kinds of advanced chips used in AI was also strong .
Nvidia stock briefly popped on the news, and Arm Holdings stock gained as much as 6%, showing that the report was seen as bullish for the broader AI chip sector.
What does it mean for TSMC?
TSMC stock hasn’t experienced the kind of dramatic breakout that AI stocks like Nvidia, Super Micro Computerand even Arm have, but the company is playing a central role in the AI boom, as the contract chip manufacturer makes about 90% of advanced chips for fabless chip designers, including ones like Nvidia, Arm, Broadcomand AMD that all see AI as a huge potential growth driver.
April’s growth was a significant acceleration from 16.5% revenue growth in the first quarter, and it clearly bodes well for the company’s performance in the second quarter and beyond. Month-to-month results can be erratic in chip manufacturing, but if TSMC can maintain this momentum, the stock should continue to climb.
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Jeremy Bowman holds positions in Broadcom. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
Why Taiwan Semiconductor Stock Was Moving Higher Today was originally published by The Motley Fool
