The chip industry just got a much-needed boost as Trump tariffs loom large
Dado Ruvic/REUTERS
- Chip stocks got a glimmer of good news on Thursday after TSMC reported earnings.
- TSMC beat profit expectations and, perhaps more importantly, didn't cut its annual sales forecast.
- Concern has been mounting over the tariffs, with Nvidia issuing a warning on Wednesday.
Chips stocks got a much-needed boost on Thursday after Taiwan Semiconductor beat earnings for the quarter, lifting the outlook for the sector amid the looming threat of Trump's tariffs.
Perhaps even more crucial than the first-quarter beat, however, was the fact that TSMC didn't cut its sales forecast. The decision signaled that the company sees chip demand staying strong, even as worries mount that tariffs could throw a wrench in.
Those concerns hit a fever pitch on Wednesday after Nvidia said it expects to take a $5.5 billion earnings hit because of Chinese tariffs levied by Trump. Stocks traded lower, finishing the day deeply in the red.
Recent fortunes were reversed by TSMC on Thursday, and it lifted the entire chip sector. Here are the most notable moves:
- TSMC: +3% (-3.6% yesterday)
- Advanced Micro Devices: +1% (-7.4% yesterday)
- Micron Technology: +0.3% (-2.4% yesterday)
- Broadcom: +0.2% (-2.4% yesterday)
Thursday's trading offers a change of pace for chip stocks, which have struggled so far this year amid concern over waning demand for AI chips in the US and the impact of Trump's tariffs on China, which could potentially raise costs and inhibit sales.
Since the start of the year, Nvidia, TSMC, and Broadcom are down more than 24%, while Advanced Micro Devices has lost even more
The iShares semiconductor ETF, which tracks US semiconductor stocks, is down 23% year-to-date.