Demand for AI boosting chip stocks, Nvidia and TSMC remain solid buys.

From Nasdaq: 2024-11-24 20:00:00

Demand for AI is boosting chip stocks, with the AI chip market expected to grow over 30% in 2024. Nvidia’s strong earnings report and upcoming AI computing platform Blackwell set it up for growth. Taiwan Semiconductor Manufacturing benefits from AI-related demand, with revenue up 36% YoY in Q3 and a bright future ahead.

Nvidia shares are up 186% YTD, with strong demand for GPUs and Hopper chips. Blackwell, the new AI computing platform, is expected to drive growth in 2025. Despite its $3.5 trillion market cap, Nvidia’s value looks reasonable compared to earnings estimates, with potential for market-beating returns.

Taiwan Semiconductor Manufacturing shares are up 91% in the last year, driven by AI-related demand and high margins. The company controls 62% of the global foundry market and expects capital expenditures to increase to over $30 billion for the year. With a forward P/E ratio of 27 on 2024 estimates, TSMC stock remains a solid buy.

Consider investing in Nvidia, but note it’s not one of Motley Fool’s 10 best stocks. Stock Advisor has provided guidance since 2002, quadrupling the return of the S&P 500. John Ballard holds positions in Nvidia, and the Motley Fool has positions in and recommends Nvidia and Taiwan Semiconductor Manufacturing.



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