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Tsmc driven by the race for artificial intelligence

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Tsmc driven by the race for artificial intelligence

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Taiwan Semiconductor Manufacturing’s upcoming results could push the stock even higher. Some market watchers see the world‘s largest chip foundry raising its revenue and capital spending forecasts for the year following better-than-expected sales in the latest quarter, according to Bloomberg. This would demonstrate that strong growth powered by AI will be sustained.

As a key maker of chips designed by Nvidia and others, TSMC is seen as a major beneficiary of the artificial intelligence boom. While the current outlook for smartphones and other consumer products remains cloudy, the industry’s continued upgrades to increasingly refined circuitry are another silver lining.

“The most important thing to keep an eye on is capex expectations, as they tend to be an indication of the demand they are seeing,” said Xin-Yao Ng, investment director at abrdn. «We believe Tsmc is still worth buying because the stock’s gains are supported by fundamentals: its dominant position and technological leadership in the most advanced chip nodes allow it to achieve earnings growth at high rates for longer ».

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