TSM’s Stock Price Up Big YTD – 3.5% Daily Gains As Revenue Soars on AI and Data Center Investment

Taiwan Semiconductor Manufacturing Company stock price (NYSE:TSM), a leading chipmaker, experienced a rise following its announcement of substantial sales growth in the second quarter. 3.54% gains on the day yesterday brings the cumulative rise of TSM stock to 88% on a YTD basis.

With barely half of 2024 under our belts, TSMC is gaining a lot of attention. Part of the growth has been credited to the surging demand tied to the artificial intelligence (AI) boom and a significant increase in the investment in data centres.

TSMC reported a striking 40% growth in its June quarter, with revenue reaching NT$673.5 billion. This figure notably exceeded market expectations, which had forecast a 35.5% increase. The robust revenue for June alone stood at NT$207.9 billion, further highlighting the company's strong performance during the period.

The company's success can be partly attributed to its exclusive partnerships with tech giants such as Nvidia (NASDAQ:NVDA) and Apple (NASDAQ:AAPL). TSMC is the sole supplier of advanced chips for these prominent industry players, securing a critical position in the global supply chain of sophisticated semiconductors.

A dampening in smartphone sales has been offset by the rising orders for AI chips. While smartphone sales are showing signs of recovery, the demand for AI chips has played a vital role in the company's revenue streams.

Owing to the AI-related developments, TSMC and similar stocks have propelled the Taiex Index in Taiwan up by over 40% in the past year, despite the ongoing tensions between the U.S. and China regarding Taiwan. In the United States, TSMC's shares have surged by more than 77%, significantly outpounding the broader market's performance.

The upward valuations expected in 2024 are causing some investors to exercise caution in investing additional funds into stocks. Despite the bullish runs, there is a visible hesitation among some segments of the investing community.

For investors seeking direction on the next investment frontier, accessing the company's proven portfolios may provide insight into high-potent opportunities. As the landscape shifts, particularly in cutting-edge sectors like AI, positioning within influential market players like TSMC could be a strategic move.

TSMC's second-quarter financial results underscore the growth potential within the AI and data center investment space. As the exclusive chip supplier to industry heavyweights, the company's financial growth is a testament to the strategic partnerships and market demands. While investors exhibit some hesitation, the company's stock performance and role in market-driving indices reflect a strong investor confidence that shows promise for future returns.