Nvidia’s shares surge to record high with TSMC acting as a catalyst

Nvidia witnessed its shares soar to a record high on Thursday as investors rallied around the resurgent chip sector, on the back of an upturn for TSMC, the world’s largest advanced chip producer. 

After a relative slump over the summer months, Nvidia’s stock jumped by more than 3% to a new intraday high of $140.89, exceeding the previous level of $140.76, set on June 20.

The day closed with shares up around 1% at $136.93. 

A catalyst for the spike was TSMC reporting better than expected third-quarter results, posting a 54% increase in profit, as the Taiwanese flag carrier saw its US-listed stock rise by more than 11%. 

This resulted in the company’s market capitalization exceeding $1 trillion.

With TSMC supplying Nvidia, as well as other tech giants such as Apple and AMD, its fortunes are often referred to as a bellwether for the wider industry. This was evidenced again on Thursday with the share price success.

“Nvidia is one of TSMC’s major customers, so there is a direct read-across to the American chip firm in the Taiwanese company’s results,” said Dan Coatsworth, investment analyst at AJ Bell, speaking to Reuters. 

Shares of Taiwan Semi surged on better-than-expected Q3 earnings, which led Nvidia to hit a record high.@MichaelSantoli looks at the chips sector and its leaders.$TSMC $NVDA pic.twitter.com/gBQP7Jhvpa

— CNBCOvertime (@CNBCOvertime) October 17, 2024

Nvidia has predicted a further positive outlook, with anticipation growing around its next-generation ‘Blackwell’ artificial intelligence chip.

In an interview with CNBC on October 3, Nvidia CEO Jensen Huang said the demand for its AI GPU is “insane,” with the company expecting to record billions of dollars worth of Blackwell revenue during the fourth quarter. 

With Blackwell expected to cost around $30,000 to $40,000 per unit, Huang said, “Everybody wants to have the most and everybody wants to be first.” 

Nvidia’s CEO has been at the forefront of securing a partnership with Foxconn, the world’s largest contract electronics manufacturer, to build ‘AI factories’ together. 

The other Taiwanese giant is set to construct a mammoth manufacturing facility for Nvidia’s GB200 superchips in Mexico, with the scale of the upcoming plant described by its chairman Young Liu as “very, very enormous”.

Image credit: Via Midjourney

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