Shares of Apple, Nvidia supplier Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) are rising solidly higher in premarket trading on Wednesday.
The upside could be traced back to the industry-wide optimism generated by Advanced Micro Devices, Inc.’s (NASDAQ:AMD) quarterly results, which confirmed that the AI revolution is alive and kicking. Bargain hunters could trade on this catalyst after the tech space suffered a rout in recent weeks amid a rotation out of these stocks into the underperforming SMID-cap stocks.
From the July 11 high of $193+, TSMC’s U.S.-listed ADRs lost about 20%.
See Also: Best Artificial Intelligence Stocks
The stock may also be receiving support from the fact that all AI-levered mega-caps are notably raising their capex spending plans. Deepwater Asset Management’s Gene Munster said in a post on X, formerly Twitter, that Microsoft’s capex is up about 51% year-over-year. While noting that it is a near-term negative for the software giant, given its margin-eroding effect, the tech venture capitalist said it could be positive for the company in the long run.
Also, he said, this is good news for TSMC in 2024, as the Taiwanese foundry makes custom-made chips for big tech players all over the world.
In premarket, TSMC climbed 4.57% to $161.60, according to Benzinga Pro data.
Read Next:
Photo by Ivan Marc via Shutterstock