ai demand fuels nvidia and tsmc stock surge
San Jose, Tuesday, 7 January 2025.
Nvidia and TSMC stocks experienced a significant boost following Foxconn’s announcement of record fourth-quarter revenue. This surge in stock prices is attributed to the strong demand for artificial intelligence (AI) servers and new computing products, reflecting the ongoing AI boom. Foxconn, a major supplier for Apple, reported a 15% year-over-year revenue increase, underscoring the robust AI market. This momentum also affected other semiconductor companies, with stocks like AMD, Qualcomm, and Broadcom seeing notable gains. Microsoft’s plans to invest $80 billion in AI-capable data centers further bolstered confidence in the semiconductor sector. The market anticipates continued growth driven by AI advancements, highlighting a promising outlook for the industry as AI demand reshapes the semiconductor landscape.
Record revenues signal AI market strength
Foxconn reported exceptional fourth-quarter results with revenue reaching NT$2.13 trillion ($65 billion), marking a 15% year-over-year increase [1][2]. The company attributed this growth to robust demand for AI servers and computing products [1]. This performance triggered a broad rally in semiconductor stocks, with TSMC’s shares climbing 5.5% to reach historic highs [3]. The market response reflects growing investor confidence in sustained AI-driven demand [1][2].
Nvidia leads semiconductor surge
Nvidia’s stock rose 3.4% following Foxconn’s announcement [1]. The company’s position as a leading AI chip designer has made it particularly sensitive to positive AI market indicators [3]. Industry analysts note that Foxconn’s results provide encouraging signals for Nvidia’s upcoming Blackwell chip production capacity [1]. The semiconductor sector’s Philadelphia Index gained 2.8% [1], demonstrating widespread market optimism.
Price increases reflect market dynamics
TSMC plans to raise foundry prices for various chip processes by 3% to 8% in 2025, with AI-related chip orders potentially seeing increases of 8% to 10% [3]. Advanced packaging services like CoWoS may experience even higher price hikes of 15% to 20% [3]. These pricing adjustments reflect the strong demand for AI computing capabilities, with the AI server market projected to reach $298 billion in 2025 [5].
Industry-wide momentum builds
The positive sentiment extended beyond major players, with European semiconductor companies showing substantial gains. ASML saw its stock rise by 8.7%, while STMicroelectronics and Infineon experienced increases of approximately 7% [4]. Asian manufacturers also benefited, with SK Hynix and Samsung seeing gains of 10% and 3% respectively [2]. Microsoft’s announcement of an $80 billion investment in AI data centers for 2025 further reinforced market confidence [4].