Nvidia CEO Jensen Huang delivers a keynote speech during the Nvidia GTC conference at the SAP Center in San Jose, California, on March 18, 2024.
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Nvidia Apple Inc. shares rose about 3% in trading on Thursday, a day after the stock fell 7% on geopolitical concerns sparked by comments from U.S. presidential candidate Donald Trump.
Nvidia's rise came after Taiwan Chip Manufacturing Co. TSMC said Thursday that demand remains high and supply remains constrained for advanced artificial intelligence chips made by Nvidia.
“I am also trying to balance supply and demand, but I can't. Today, demand is so high that I have to work very hard to meet customer demand,” Wei told analysts.
“Supply will remain very tight through 2025,” TSMC Chairman C.C. Wei said Thursday. The maker reported revenue and net income above analysts’ expectations on Thursday, and the stock fell less than 1%.
The semiconductor sector on Wednesday posted its worst day since 2020, with big declines from AMD, arm, Broadcom And Qualcomm Along with Nvidia. Chip stocks have been dragged down by geopolitical concerns, highlighted by comments from U.S. presidential candidate Donald Trump that he is considering changing U.S. policy to not protect Taiwan from Chinese invasion for free. A Chinese invasion could raise questions about Nvidia’s chip supply.
“As concerns grow about geopolitical tensions amid the upcoming U.S. presidential election, TSMC has said it will continue its overseas expansion to mitigate risks,” Citi analyst Laura Chen wrote in a note on Thursday. TSMC is currently building a large chip factory in Arizona, partly funded by U.S. subsidies.
Other chipmakers are still struggling. arm decreased by 2%, AMD It decreased by 2%, and Qualcomm It was flat. supercomputer, Shares of major server assembler Nvidia fell 2%.
Intel Corporation It increased by more than 1%, and Broadcom Apple shares rose about 3% after a report that it was in talks to produce artificial intelligence chips for OpenAI.
The Biden administration is considering further trade restrictions on the shipment of chipmaking equipment to China, Bloomberg reported on Wednesday. ASML, a Dutch company that makes the machines TSMC uses to make chips, fell 1% after it reported soft sales guidance for the current quarter on Thursday.
Investors are taking gains from strong semiconductor performance and reallocating them into other stocks, though comments later this year on how companies are delivering returns on investment in AI chips could spur the sector higher again, UBS analysts wrote in a note Thursday. Nvidia stock is up more than 150% so far in 2024.
“After the semiconductor sector’s sharp outperformance in the first half, some investors have rebalanced exposure to AI-related semiconductors in large platforms and non-profit technology companies,” UBS analysts wrote in the note.