Nvidia Stock Positioned for Growth Amid TSMC’s Surge in Sales

Nvidia investors have faced challenges recently, with the stock price falling about 10% in the past three months despite strong growth.

Factors like AI chip demand concerns and competition have weighed on the stock. However, recent data from Taiwan Semiconductor Manufacturing (TSMC) provides a positive outlook.

TSMC’s 36% year-over-year revenue increase for January 2025 signals that demand for AI chips, including Nvidia’s, is still strong.

TSMC reported impressive growth in late 2024, particularly in the final two months, which coincides with Nvidia’s fiscal fourth quarter. This could lead to stronger-than-expected results for Nvidia when they release their earnings in February.

TSMC, which manufactures chips for Nvidia, is expected to increase its advanced packaging capacity by 85% in 2025 to meet the growing demand for AI chips. Nvidia, being a key customer, is poised to benefit from this capacity expansion.

Additionally, major tech companies like Meta, Microsoft, and Amazon are expected to boost their capital spending on AI infrastructure in 2025, providing a solid demand environment for Nvidia’s chips.

With an estimated 85% share of the AI chip market, Nvidia is well-positioned for continued growth, which could boost its stock performance.