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TSMC Shares Hit Record High on AI Boom, Poised for Best Year Since 1999

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, saw its shares reach a record high on Tuesday, Bloomberg reports. This surge positions the company for its best annual stock performance in 25 years.

TSMC shares climbed as much as 1.4% in Taipei on Tuesday, surpassing their previous peak set on November 8, before leveling out by the end of the day. This move was fueled by a rally in US chip stocks, including key TSMC customer Nvidia Corp., overnight. TSMC shares are up a remarkable 82% for the year, driven by continued investor enthusiasm for artificial intelligence.

"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, to Bloomberg. Net also noted that upcoming presentations by Nvidia at CES 2025 and TSMC's financial results will be key catalysts to watch.

TSMC has benefited significantly from the rapid growth of AI spending. The company counts Apple Inc. and Advanced Micro Devices Inc. among its diverse clientele. TSMC is projected to report a 36% increase in sales for the December quarter, with a gross profit margin of 58.3%, marking its highest since 2022.