Applied Materials Inc. (AMAT), a leading supplier of semiconductor manufacturing equipment, witnessed its stock soaring 5.05% in morning trading on Thursday. This surge was fueled by the strong earnings report from Taiwan Semiconductor Manufacturing Co. (TSMC), a major customer, and the company's optimistic outlook for demand in the artificial intelligence (AI) chip market.
TSMC, the world's largest contract chipmaker, reported a staggering 57% leap in fourth-quarter profit, driven by surging demand for advanced chips used in AI processing. The company projected robust revenue growth for the first quarter of 2025, bolstered by the continued growth in AI-related demand.
Moreover, TSMC's capital expenditure plans for 2025, ranging between $38 billion and $42 billion, exceeded analysts' expectations. This substantial investment in technology and capacity upgrades could bode well for semiconductor equipment companies like Applied Materials and Lam Research, which saw their shares rise premarket.
