TSMC sees significant sales increase, boosting Nvidia outlook
- TSMC reported a 22.2% increase in April sales month over month, reflecting strong demand.
- Despite TSMC's positive results, Nvidia's stock declined on the same day due to export restriction concerns.
- The situation indicates continued strong demand for Nvidia products, signaling resilience in the semiconductor market.
In Taiwan, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading semiconductor manufacturer, announced its sales results for April 2025. The company reported an impressive 22.2% increase in sales from March and a staggering 48.1% rise year over year. This positive performance is deemed particularly significant as TSMC serves as the primary chip supplier for Nvidia, a key player in the semiconductor market. As a result of this strong sales performance, TSMC's stock saw an uptick, indicating investor optimism regarding the future prospects of its major clients, including Nvidia. Despite the favorable sales report from TSMC, Nvidia's stock experienced a decline on the same Friday. However, it was noted that Nvidia is on track to close the week with positive overall performance, demonstrating resilience in a fluctuating market. The decline in Nvidia's stock price on this specific day was attributed to various factors, including ongoing uncertainties regarding stringent U.S. export restrictions. Reports indicated that Nvidia is preparing to release a downgraded version of its H20 AI chips that will comply with these restrictions for the Chinese market. Market analysts have expressed mixed sentiments regarding this development. While the compliance with U.S. regulations could potentially limit Nvidia's competitive edge against local competitors in China, such as Huawei, the overall demand for Nvidia chips remains high among customers. The expectation is that, despite the trade restrictions, there will continue to be substantial demand for Nvidia's products, underscoring the brand’s established position in the sector. Meanwhile, the stock market on Friday saw the S&P 500 index slightly lower, but it was noted that it concluded the week at a similar level to its opening. This reflects a period of correction and consolidation following the recent historic recovery of the stock market. With earnings reports anticipated to slow down in the coming week, only nine S&P 500 companies were scheduled to report earnings. Among these, Cisco and Walmart were highlighted as noteworthy. Economic data releases, including inflation metrics, were forthcoming, influencing market sentiment heading into the next week.