TLDR:
- Nvidia stock hit record high, market cap reached $3.4 trillion
- Asian semiconductor stocks rose following Nvidia’s gains
- Nvidia suppliers like SK Hynix and TSMC saw significant stock increases
- Nvidia’s shares up ~180% year-to-date, driven by AI demand
- Taiwan Semiconductor’s upcoming earnings report could signal continued strong AI chip demand
Nvidia, the AI chip powerhouse, closed at an all-time high on Monday, sending ripples through the Asian semiconductor market.
The company’s stock price surge pushed its market value to a staggering $3.4 trillion, overtaking Microsoft as the second most valuable company on Wall Street, just behind Apple.
The rally wasn’t limited to Nvidia alone. Asian chip stocks tied to Nvidia’s supply chain saw significant gains as investor optimism spilled over.
South Korean chipmaker SK Hynix, which produces high bandwidth memory chips for AI applications, saw its shares jump 2.8%. Samsung Electronics, another potential supplier for Nvidia’s products, experienced a 0.5% increase.
In Taiwan, semiconductor giant TSMC and electronics manufacturer Foxconn saw their stocks climb by 2.4% and 3.5% respectively. Japanese firms in the sector also benefited, with Tokyo Electron surging 5%, Advantest gaining 3.8%, and Renesas Electronics rising over 4%.
The surge in Nvidia’s stock price comes as Wall Street gears up for the upcoming earnings season. Many of Nvidia’s top customers, including tech giants Microsoft, Meta, Google, and Amazon, have been investing heavily in Nvidia’s graphics processing units (GPUs) to power their advanced AI initiatives.
These companies are set to report their quarterly results by the end of October, potentially providing further insight into the demand for AI chips.
Nvidia’s meteoric rise has been nothing short of remarkable. The company’s shares have skyrocketed by almost 180% since the beginning of the year, reflecting the growing enthusiasm for AI technologies across various industries. This impressive performance has allowed Nvidia to recoup earlier losses it experienced following its second-quarter earnings report in August.
Looking ahead, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip manufacturer, is scheduled to release its third-quarter financial report on Thursday.
As a key supplier to Nvidia, TSMC’s results could offer valuable insights into the ongoing demand for AI chips. Early indicators suggest robust performance, with TSMC’s monthly revenue reports pointing to year-over-year growth of around 39% for the quarter ended September 30.
Nvidia CEO Jensen Huang has been vocal about the company’s future prospects, particularly regarding its next-generation Blackwell architecture. In recent interviews, Huang stated that Blackwell is in full production and that demand for the new chips is “insane.”
This enthusiasm is echoed by analysts at Morgan Stanley, who project that Nvidia could generate $10 billion from Blackwell chips during the company’s fiscal 2025 fourth quarter.
While Nvidia’s stock price already reflects significant growth expectations, many analysts believe that the AI revolution is still in its early stages.
Estimates suggest that the market value of generative AI could reach between $2.6 trillion and $4.4 trillion annually in the coming years, potentially providing ample room for further expansion in the sector.
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