Why Is Nvidia Stock Trading Higher Friday?

Nvidia Corp NVDA stock maintained its rally Friday along with peers Advanced Micro Devices, Inc AMD as chief contract chipmaker Taiwan Semiconductor Manufacturing Company Ltd TSM won the Street with its upbeat quarterly results and guidance.

The Taiwanese semiconductor manufacturer reported a revenue of $19.62 billion in the fourth quarter, a slight decrease of 1.5% compared to last year, yet surpassing the expected $19.45 billion Thursday. With earnings per share (EPS) at $1.44, it exceeded the anticipated $1.37.

For the fiscal year 2024, Taiwan Semi anticipates revenue growth ranging from low to mid-20%. The company has set a capital expenditure budget between $28 billion and $32 billion for FY24, compared to the $30.45 billion spent in 2023.

The optimistic outlook from Taiwan Semiconductor Manufacturing Co on capital spending and revenue growth led to a significant increase in semiconductor stock values, with companies like Tokyo Electron Ltd and Nvidia adding over $160 billion in market value, Bloomberg reports.

According to Wedbush analysts, Taiwan Semi’s confidence in near-term fundamentals has significantly improved, buoyed by expectations of AI’s increasing contribution and better prospects for traditional end markets in 2024.

Meanwhile, on Thursday, Meta Platforms Inc META CEO Mark Zuckerberg announced a significant investment in Nvidia’s AI chips, focusing on building a robust computing infrastructure.

This plan includes acquiring 350,000 H100 graphics cards from Nvidia by 2024’s end, with an estimated expenditure of nearly $9 billion, as the H100 cards are priced between $25,000 and $30,000.