Premarket rally in chip stocks led by TSMC & Nvidia after blowout AI chip earnings
Premarket rally in chip stocks led by TSMC & Nvidia after blowout AI chip earnings in The semiconductor sector saw a sharp premarket rally today, led by Taiwan Semiconductor Manufacturing Company (TSMC) and Nvidia, after both reported blowout earnings fueled by relentless demand for AI chips. As of early trading hours, TSMC surged over 6%, while Nvidia gained nearly 4.8%, lifting the broader tech sector and fueling investor optimism around the AI boom.
How much money did TSMC make in the AI chip boom?
During the AI chip boom, TSMC (Taiwan Semiconductor Manufacturing Company) generated an estimated $13.2 billion in revenue from AI-related chip production in Q2 2025 alone, marking a 40% year-over-year increase in its AI segment. This surge was driven by explosive demand from tech giants like Nvidia, AMD, and Apple, all relying on TSMC’s advanced 3nm and 5nm nodes to power their AI processors. As the backbone of the global AI supply chain, TSMC’s profits soared, reinforcing its position as the world’s most critical semiconductor foundry. Investors and analysts alike see this revenue spike as a clear sign that AI chip manufacturing has become a core driver of TSMC’s growth, with projections suggesting even higher earnings in the coming quarters.
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What’s Driving the Chip Stock Rally?
- TSMC Smashes Estimates with AI Chip Orders Surging
TSMC, the world’s largest chipmaker, posted Q2 2025 results that beat both revenue and profit expectations. The company reported a 25% YoY increase in earnings, attributing it primarily to:
- Soaring demand for AI-specific semiconductors
- Continued dominance in advanced 3nm process nodes
- Strength in servicing top clients like Apple, AMD, and Nvidia
Key Stat: TSMC’s AI chip-related revenue rose 40% YoY, signaling robust industry-wide adoption of machine learning infrastructure.
- Nvidia Continues AI Domination
Nvidia, the top player in AI GPU chips, posted another record quarter driven by:
- Explosive demand for its H200 and B100 AI GPUs
- Strong uptake by hyperscalers (Amazon, Google Cloud, Microsoft Azure)
- Expanding footprint in enterprise AI software and inference solutions
Wall Street Take: Analysts are now projecting $30B+ in annualized AI revenue for Nvidia in 2025—more than double its 2023 figures.
Market Reactions: Premarket Highlights
| Stock | Premarket % Gain | Reason |
| TSMC | +6.2% | Earnings beat, AI demand surge |
| Nvidia | +4.8% | Record AI GPU sales |
| AMD | +3.4% | Riding sector tailwinds |
| ASML | +2.9% | Increased chip equipment orders |
| Intel | +1.7% | Speculative bounce |
The SOXX ETF, which tracks semiconductor stocks, is up 3.5% premarket—one of its strongest opens this quarter.
Why This Matters to Investors
1. AI Chip Demand Is Now a Global Growth Engine
The rally underscores how AI chip demand isn’t just a short-term hype. It’s now a primary growth driver for global semiconductors—transforming data centers, telecom, robotics, and even defense.
2. TSMC’s Role in the AI Supply Chain
As a key foundry for AI chipmakers, TSMC’s results provide a leading indicator for broader tech sector health. Investors now view its quarterly performance as a “bellwether” for the AI economy.
3. Opportunity in Undervalued Chip Stocks
This rally may spark broader interest in second-tier semiconductor plays—such as Marvell, Micron, and Lam Research—which could be undervalued AI beneficiaries.
Analyst Opinions
Morgan Stanley: “TSMC’s results validate the AI infrastructure supercycle. Expect chip stock momentum to sustain through Q3.”
Wedbush Securities: “Nvidia continues to be the most important stock in the AI era. These numbers suggest we’ve entered a new baseline of demand.”
Goldman Sachs: “We anticipate 2025 will be the strongest semiconductor revenue year on record.”
What Should Investors Do?
Short-Term Traders:
- Watch for gap-up openings and potential intraday volatility.
- Look for volume breakouts on AI chip adjacent names like Marvell, GlobalFoundries, and ASML.
Long-Term Investors:
- Consider dollar-cost averaging into semiconductor ETFs like SOXX, SMH, or AI-focused tech funds.
- Review positions in infrastructure suppliers and AI chip software ecosystem players.
Final Thoughts
Today’s premarket rally is more than a headline—it’s a signal that the AI semiconductor boom is real, scalable, and still gaining speed. With TSMC and Nvidia leading the charge, chip stocks are once again becoming the beating heart of the tech market.
For investors looking to ride the AI wave, this might just be the breakout moment.
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