Nvidia: TSMC Shares Hit Record High After Morgan Stanley Raises Client’s Price Target

Paresh Jadhav

10 months ago

Morgan Stanleys upgrade of NVidia’s price target was seen as an indication that chipmakers from Apple Inc to Nvidia Corp could experience a recovery in capital spending and revenue this year.

Nvidia has already experienced an upswing in orders since their record earnings report, with industry contracts noting new orders from customers who hadn’t previously been considered major buyers.

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AI chip demand

Nvidia (NVDA), thanks to surging demand for artificial intelligence chips, has quickly become one of the world’s most valuable technology companies. Based out of Santa Clara, California’s chipmaker is currently the world’s top producer of GPUs used to power AI applications; AI allows machines to learn and adapt by performing human-like tasks without human input.

Nvidia GPUs are more powerful than central processors found in most enterprise and cloud networks, prompting businesses to upgrade their systems in order to support AI training and development – driving sales of chips.

Upgrades have also led to a spike in data center spending, providing them with much needed relief after years of slumping global demand. Meanwhile TSMC is expanding their manufacturing capacity with the opening of a plant in Japan dedicated to producing 6-nanometer chips – more advanced than their 3-nanometer counterparts.

B100 GPU

TSMC, Apple Inc. and Nvidia Corp’s primary chipmaker, is reaping the rewards of rising AI demand, pushing its shares to an all-time high on Thursday when trading resumed at Taiwan Stock Exchange following the Chinese New Year holiday break.

Nvidia’s Blackwell B100 GPU will more than double the performance of their flagship Hopper H200 graphics processor when released next year, according to a presentation at SC23 by Nvidia. B100 GPUs will utilize TSMC’s 3nm process technology.

Blackwell GPU family could help increase data center sales as well as gaming card demand. The B100, currently set at around $1,030 is projected to provide about double performance over its predecessor generation and may help them expand into Intel territory; AI has only further strengthened this trend.

2-nanometer GPU

Nvidia currently produces its flagship AI processors, also known as GPUs, using TSMC’s 3-nanometer process. However, they plans on switching production over to its 2-nanometer process which could increase chip performance by 25% while simultaneously decreasing power consumption by 11%.

Morgan Stanley analysts including Charlie Chan noted in their Feb. 7 note to clients that the new process will have “an important near term impact on B100 lead times and competitive dynamics,” helping Nvidia meet increased AI chip demand as industry trends increasingly favor larger chat language models like those found within popular AI tools such as ChatGPT.

Nvidia and Apple will be among the inaugural customers to commence production with TSMC’s impressive $12 billion Arizona facility, set for an early 2024 pilot run and full production starting around 2025. The company plans on starting mass production approximately two years later.

Nvidia’s commitment to meeting the surging demand

Nvidia’s efforts in meeting the surging demand for artificial intelligence chips has won investors over, drawing their consideration. These special chips are specifically tailored for AI applications which have become prevalent across a variety of industries from autonomous vehicles to data centers.

They recently took the market by storm with an astonishing forecast beat, unveiling revenue projections that far surpassed those predicted by financial analysts. This astounding result led to an immediate share surge and propelled Nvidia’s market value to new heights.

TSMC, one of the world’s premier advanced processor manufacturers, has also seen its shares soar nearly 9% since trading resumed in Taiwan after the Lunar New Year holiday week.