Demand for AI chips boosts Nvidia and TSMC’s market value in October

• NVIDIA and TSMC experienced a significant increase in market value in October, primarily due to strong demand for AI chips.
• Although Apple’s market value briefly fell to $3.4 trillion, it later rebounded. However, the market value of Meta Platforms and Microsoft declined after both companies warned that the cost of AI is rising.

What happened

With the surge in global demand for AI chips, Nvidia and TSMC experienced significant growth in their market capitalisation in October. Nvidia’s market value increased by 9.3%, reaching $3.26 trillion. Meanwhile, TSMC’s market value grew by 6.5%, reaching $832.8 billion. This growth followed TSMC’s release of better-than-expected financial results and an optimistic outlook on AI demand.

Despite Apple’s market value declining by 3% to $3.4 trillion last month due to moderate growth expectations and weak sales in China, briefly ceding the title of the world’s most valuable company to Nvidia, it rebounded shortly after. The market values of Meta Platforms and Microsoft declined in October as both companies warned of rising artificial intelligence costs. Mark Haefele, Chief Investment Officer of UBS Global Wealth Management, advises investors to take advantage of increased volatility to boost their investments in AI stocks.

In Asia, Tencent Holdings’ market value fell by 9% to $483 billion, while the market value of the American pharmaceutical company Eli Lilly dropped by 6.45% to $787.6 billion due to its quarterly sales falling short of expectations. The market value growth of Nvidia and TSMC indicates strong demand for high-performance AI chips.

Also read: AI boom propels TSMC to trillion-dollar club, now 8th globally in market value

Also read: US may allow Nvidia to export advanced AI chips to Saudi Arabia, Semafor reports  

Why it is important

Nvidia, as the world’s largest provider of AI computing power and a leading AI chip giant, has seen its market value grow, highlighting the company’s exceptional achievements in technological innovation and market expansion, as well as the significance of the AI era for the global economy. As the world’s leading high-end chip foundry, TSMC has almost completely captured the high-end chip market, particularly in AI chip manufacturing, solidifying its position as a crucial player in the AI supply chain. The production capacity of high-end chips has become a scarce resource, and TSMC’s market value growth reflects its pivotal role in the global supply chain.

Governments worldwide have introduced policies to encourage the development and innovation of the artificial intelligence chip industry. In China, specifically, the government has issued a series of supportive industry policies, creating a favourable environment for the AI chip sector. With ongoing technological advancements and the expansion of application scenarios, AI chips are set to play an increasingly important role in various fields, injecting new momentum into economic and social development.