Nasdaq Rebounds as AI Stocks Regain Attention
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 day ago
0mins
Should l Buy TSM?
Source: NASDAQ.COM
- Market Sentiment Recovery: Following an extended ceasefire in Iran, investor confidence in AI stocks has rebounded, propelling the Nasdaq back to all-time highs, indicating renewed interest in technology stocks.
- Surge in AI Demand: Taiwan Semiconductor Manufacturing confirmed during its earnings call that demand from AI customers continues to explode, suggesting that the potential of AI technology in real-world applications has yet to be fully realized, which could lead to more growth opportunities in the coming years.
- Valuation Correction Opportunity: Despite the Nasdaq's rebound, many high-quality AI stocks remain relatively undervalued, with Nvidia trading near its lowest price in a year, providing investors with an opportunity to enter the market at reasonable prices.
- Long-Term Growth Outlook: The application of AI technology is gradually deepening as companies begin to tackle real-world problems, indicating that the AI growth narrative is set to continue, making it an opportune time for investors to consider AI-related stocks.
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Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 404.980
Low
63.24
Averages
313.46
High
390.00
Current: 404.980
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Consistent Outperformance: The company has surpassed analysts' EPS estimates for ten consecutive quarters and has been raising its full-year sales forecast nearly every quarter, indicating strong competitive positioning and growth confidence in the market.
- Significant Valuation Pressure: Despite strong growth, Palantir's price-to-sales ratio exceeding 100 raises concerns about sustainability, as historical data suggests that companies with P/S ratios above 30 often face valuation bubble risks, making investors wary of future performance.
- Market Volatility Anticipation: Historically, Palantir's stock has fluctuated by as much as 12% following earnings reports, and with the upcoming report on May 5, investors should brace for significant market reactions, indicating potential volatility ahead.
See More
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- TSMC's Growth Potential: Taiwan Semiconductor expects a compound annual growth rate of 25% from 2024 to 2029, significantly outpacing Apple's growth, highlighting its critical role and competitiveness in the AI market.
- Broadcom's Market Position: As a design partner for custom AI chips, Broadcom anticipates 63% growth in fiscal year 2026 and 52% in fiscal year 2027, showcasing its strong prospects in the rapidly evolving AI sector.
- Apple's AI Disadvantage: Despite Apple's strong quarterly performance, its lack of innovation in AI and reliance on third-party technologies render it unsuitable for inclusion in the AI-centric
See More
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- Earnings Beat: Palantir is expected to report $1.54 billion in sales for Q1, a 74% increase year-over-year, with an EPS of $0.28, surpassing analyst expectations and showcasing strong performance driven by its AI-powered Gotham platform, despite valuation concerns.
- Sustained Growth: The company has exceeded Wall Street's EPS estimates for 10 consecutive quarters, primarily due to long-term contracts with the U.S. government and its applications in military mission planning and data analysis, indicating a competitive edge in the AI market.
- Valuation Pressure: Despite significant sales growth, Palantir's price-to-sales (P/S) ratio exceeds 100, far above the sustainable level of 30 in the industry, which may undermine investor confidence, as historical data suggests high P/S ratios often signal bubble risks.
- Market Volatility Anticipation: Following its last four quarterly reports, Palantir's stock has fluctuated by as much as 12%, prompting investors to prepare for potential volatility on May 5, especially given the current valuation backdrop.
See More
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- Apple Excluded: Apple has been removed from the 'Magnificent Seven' due to its poor performance in artificial intelligence (AI), despite a market cap of $4 trillion, as it lags in AI technology application, raising concerns about its growth potential.
- TSMC Added: Taiwan Semiconductor, the primary manufacturer of Apple's custom chips, is expected to achieve a compound annual growth rate of 25% from 2024 to 2029, making it a more suitable member of the 'Magnificent Seven' as the market increasingly values AI technology.
- Tesla Replaced: Tesla has been excluded due to declining electric vehicle demand and low profitability; its 15% profit margin pales in comparison to other 'Magnificent Seven' stocks, with a market cap of only $1.4 trillion.
- Broadcom Included: Broadcom, a design partner for custom AI chips, is projected to see 63% growth in fiscal year 2026, boasting a market cap of approximately $2 trillion, significantly surpassing Tesla, indicating its strong potential and competitiveness in the AI market.
See More
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- Cloud and AI Growth: With signs of cloud growth and AI adoption emerging, the “Magnificent Seven” are set to report earnings this week, collectively planning to spend about $700 billion on capital expenditures, much of which will be directed towards AI infrastructure, indicating strong market demand for AI.
- Positive Market Response: Intel's report confirmed a surge in CPU demand driven by agentic AI, leading to a 5% increase in Taiwan Semiconductor's stock and a 5% gain in the iShares Semiconductor ETF, which holds top AI chip stocks, showcasing the strong growth potential in the semiconductor sector.
- Investor Focus: Despite Microsoft facing challenges with the adoption of its AI assistant Copilot, its cloud growth and integration with OpenAI remain focal points for investors, especially as AI technology continues to proliferate, creating high expectations for these tech giants' performance.
See More
Intel's Strong Earnings Propel AI Stocks Higher
- Intel's Earnings Beat: Intel's first-quarter results exceeded expectations and provided strong second-quarter guidance, leading to over a 10% rise in AI-related stocks like AMD and Arm Holdings, indicating robust market confidence in AI chip demand.
- Surge in Semiconductor Demand: Taiwan Semiconductor's stock jumped 5%, reflecting strong chip demand, while the iShares Semiconductor ETF also gained 5%, showcasing investor optimism in the semiconductor sector amid the proliferation of AI technologies.
- Tech Giants Earnings Season: This week will see earnings reports from the 'Magnificent Seven' companies, including Alphabet and Microsoft, which are expected to collectively invest around $700 billion in AI compute and cloud infrastructure, potentially further boosting AI-related stock growth.
- AI Technology Adoption Outlook: While Alphabet's AI technologies may not directly drive financial results, success in Gemini and TPU adoption will be key focal points for investors, while Microsoft needs to demonstrate AI adoption in its Copilot and Azure OpenAI to restore market confidence.
See More
