TSMC Leads Chip Stocks to Winning Week
Stock indices rose on Thursday and benefitted from the wide chip rally that SMC spurred with its excellent quarterly earnings.
Quick overview
- The Nasdaq Composite rose 0.25% while the Dow and S&P 500 gained 0.6% and 0.26% respectively, driven by a rally in chip stocks and banks.
- TSMC's strong quarterly earnings led to a 4.44% increase in its stock, boosting investor confidence in the chip sector.
- Despite initial market lows due to poor earnings from financial institutions and political pressures, stock indices are holding near record highs.
- Nvidia and AMD also saw gains this week, with Nvidia remaining a leader in the chip market amid concerns over foreign tech regulations.
The Nasdaq Composite added 0.25% to its near-record total on Thursday, with the Dow up 0.6% and the S&P 500 gaining 0.26% as chip stocks and banks rallied this week.
TSMC is heading up a bullish trend for chip stocks with gains of 4.44% on Thursday and the potential for further gains in the coming days. The company posted a strong quarter that broke its previous records. Several financial stocks also posted decent earnings, including Goldman Sachs and Morgan Stanley, performing better than anticipated.
The stock indices started off low this week, with poor quarterly earnings from several financial institutions and pressure from President Donald Trump on credit card rates. The market was also waiting to see if the Trump administration would move forward with criminal charges for Federal Reserve Chairman Jerome Powell and if Trump’s tariffs would be classified as illegal. The wait on these issues caused investors to tread water for several days.
The Best Performing Chip Stocks Right Now
The Supreme Court has yet to make a decision on tariffs, and the criminal investigation into Powell is continuing. That federal probe could bring into question the influence the Trump administration has on the financial markets, causing widespread stock market upheaval.
For now, Powell is still in office, and the stock indices are holding near record highs. Chip stocks are some of the best performing stocks right now, including Taiwan Semiconductors (TSM), also known as TSMC. The company has seen tremendous stock growth this week and has been instrumental in boosting the AI market and mitigating investor fears over the future of that tech niche. TSMC stock has climbed 7.5% for the week so far.
Broadcom (AVGO) is up 1.01% in premarket trading after a sharp dip on Wednesday caused by reports out of China that the government there is pushing back against foreign software. Broadcom stock is performing below its 90-day average right now and is perhaps one of the chip stocks hit the hardest by AI market fears.
Nvidia (NVDA) also fell on Wednesday but then quickly climbed back above its previous level. Chip stocks are feeling the impact from China’s move against foreign tech companies, but they are also being buoyed by TSMC’s excellent quarterly performance. Nvidia remains the market leader for chip stocks and AI components, and they expect a strong 2026 thanks to easing pressure from U.S. export regulations.
Advanced Micro Devices (AMD) rallied this week on TSMC’s earnings, gaining 1.93% on Thursday. And then another 2.45% in Friday’s premarket trading. Investors should watch the rallies from Applied Materials Inc. (AMAT) and Lam Research Corp (LRCX) as well this week, which are up 5.69% and 4.16% respectively for the day.
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