Topline

Chip stocks rallied on Thursday as American AI star Nvidia's Taiwanese manufacturing partner reported stunning profits, giving the Asian company a trillion-dollar valuation, as Wall Street's generative AI boom continues to set new records.

Important facts

Big number

$257 billion. That's how much the 10 largest stocks in the iShares Semiconductor (SOXX) exchange-traded fund gained in market capitalization in about 20 minutes after the market opened, according to data from Yahoo Finance.

Crucial quote

Wei explained that his company is “probably achieving the strongest and most comprehensive growth of all” from the AI ​​gold rush, as “almost every AI innovator” relies on TSMC to produce their custom semiconductor chips. Apple and Nvidia, the world's two most valuable companies, are top customers of TSMC and rely on the Taiwanese foundry to actually build their custom chips.

Important background

Founded in 1987 by billionaire Morris Chang, TSMC shares have risen 96% year-to-date and more than 200% in the past two years as semiconductor stocks rallied across the board with the advent of generative AI. The TSMC-led chip stock rally comes just two days after results from another non-U.S. industry giant, Netherlands-based ASML, triggered a sell-off as the company warned of “less gradual” growth in demand for its manufacturing technology – a warning , which seems to have become irrelevant to the industry due to TSMC's record profits. On Thursday, TSMC's market capitalization actually exceeded that of Berkshire Hathaway, the conglomerate led by billionaire Warren Buffett.