Taiwan Semiconductor Manufacturing Co (TSMC) , the world’s largest contract chipmaker, reported a 54% jump in quarterly profit , surpassing forecasts, thanks to soaring demand for AI-related chips . This robust performance underscores TSMC’s dominance in producing advanced chips for AI applications, with key customers like Apple and Nvidia . TSMC's net profit for 3Q2024 reached T$325.3 billion (US$10.11 billion) , exceeding the T$300.2 billion forecasted by analysts. The company's revenue rose 36% year-on-year to US$23.5 billion , driven by strong demand for smartphone and AI chips utilizing its cutting-edge 3nm and 5nm technologies . The AI boom has been a major growth driver, with AI processors expected to account for a mid-teens percentage of TSMC's overall revenue for 2024. TSMC's capital spending for the current quarter is set to more than double to US$11.5 billion , and it expects capital expenditure to increase further in 2025 as demand remains robust. Chai
Asian equities are expected to open higher after Wall Street posted gains, driven by a shift from mega-cap tech stocks to economically sensitive small-cap shares. Early signs show Australia, Japan, and Hong Kong stock futures edging up. An index of U.S.-listed Chinese companies also climbed nearly 1%, signaling a potential recovery in Chinese equities following two days of declines.
On Wednesday, the S&P 500 rose by 0.5%, while the Russell 2000 index of small-caps reached its highest level in nearly three years, signaling growing investor confidence in smaller companies. The Nasdaq 100, home to mega-cap tech firms, lagged, rising just 0.1%, although Nvidia Corp. bucked the trend with a 3.1% gain, helping lift tech giants.
This shift in focus marks a move away from large tech companies that surged during the AI boom, with investors now looking at stocks more directly tied to economic growth. According to David Russell of TradeStation, this could be the long-awaited rotation from mega-caps to broader market sectors as the U.S. economy stabilizes.
In China, third-quarter economic data due Friday is expected to show 4.5% growth, marking the slowest expansion in six quarters. President Xi Jinping has urged officials to push hard in the final quarter to achieve the country’s 5% annual growth target. However, concerns are mounting that the government's stimulus measures may fall short of reviving growth.
Elsewhere, bond yields in Australia and New Zealand dropped slightly, mirroring moves in U.S. Treasuries. The U.S. 10-year yield fell to 4.01%, and the U.S. dollar strengthened for a third consecutive day, reaching its highest level since early August. Meanwhile, oil prices rose, and Bitcoin remained steady after reaching its highest level since July.
Traders are also watching U.S. corporate earnings closely. Morgan Stanley surged 6.5%, fueled by better-than-expected revenue, while United Airlines Holdings Inc jumped 12% after surpassing earnings estimates. Goldman Sachs predicts that the S&P 500 could finish the year well above 6,000, pointing to a potential year-end rally.
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