TSMC shares touch record high, eyeing best year since 1999 on AI

TAIWAN Semiconductor Manufacturing Company (TSMC) shares touched a record high, as the world’s largest contract chipmaker is poised to cap its best annual stock performance in 25 years.

The stock climbed as much as 1.4 per cent in Taipei on Tuesday (Dec 24), briefly surpassing its Nov 8 peak, after gains in US chip stocks including key customer Nvidia overnight. TSMC shares are now up 84 per cent this year amid continued investor enthusiasm for artificial intelligence (AI) trades.

“For us, TSMC remains the best way to play the AI theme without having to pick a winner or a technology, at a reasonable valuation,” said Kevin Net, head of Asian equities at Financiere de L Echiquier. The next catalyst to watch will be Nvidia’s presentation at CES 2025 next month as well as TSMC’s upcoming results and guidance, he added.

With a client list that also includes Apple and Advanced Micro Devices, TSMC has been a major beneficiary of the boom in AI spending. The company is expected to report sales growth of 36 per cent for the December quarter, with a gross profit margin at 58.3 per cent, the highest since 2022. BLOOMBERG