Many mouths to feed

Moody’s affirmed TSMC’s Aa3 rating and revised its outlook to positive, citing strong AI demand and tech leadership. The agency expects 30-40% revenue growth and improved EBITDA margins over the next 12-18 months. TSMC’s cash position remains strong, and Moody’s notes potential upgrades if the company maintains its market position and financial health.

TSMC's U.S.-listed ADR rose 2% to $425.97 after Nvidia projected 70% revenue growth. July revenue surged 44.7% YoY to NT$467.58B. TSMC trades 34.07% above its GF Value estimate, reflecting strong AI-chip demand.

Taiwan Semiconductor (TSMC) stock rose 2.1% after Nvidia reported strong earnings, with $96.2B revenue and $108B Q3 guidance, signaling robust AI demand. TSMC, Nvidia's exclusive chipmaker, is seen as a key beneficiary. TSMC also confirmed manufacturing new chips for Xiaomi, expanding its revenue base. The Nasdaq and S&P 500 also gained, supporting the rally.

Asian chip stocks showed mixed performance after Nvidia reported strong earnings, with $96.2B revenue and a $108B forecast. South Korean semiconductor stocks rose, while others like Advantest and Disco fell. Nvidia's shares initially dropped but later surged. Investors weighed AI demand against memory costs and margin pressures.

Asian chip firms rose after Nvidia reported Q2 revenue more than doubled and forecast strong growth, easing AI investment concerns. Nvidia's shares gained 5% in after-hours trading. However, broader markets struggled due to US inflation data showing persistent high inflation at 3.7% in July.

TSMC (TSM) reported July revenue of NT$467.58 billion, up 44.7% YoY, with 7-month revenue rising 37% to NT$2.872 trillion. Q2 sales were $40.2 billion with a 67.7% gross margin. Q3 revenue is projected at $44.6B-$45.8B. The stock trades 30.24% above its GF Value, reflecting high growth expectations.