Chipmaker TSMC returns to the list of world's 10 most valuable companies: Here’s what led to its comeback

Taiwan Semiconductor Manufacturing Company (TSMC) has reclaimed a spot in the list of the world’s 10 most valuable companies, riding the optimism of the artificial intelligence (AI) boom in the tech industry that pushed its stock to record levels.According to a report by Bloomberg, TSMC’s stock rallied 14% last week, elevating the chipmaker’s market capitalisation to a record, before a 2% decline in early trading on Monday (March 11), pared it to $634 billion. However, the decline didn’t impact the company much as it still has a market share higher than that of Broadcom, the report noted.What analysts have to sayAnalysts from Morgan Stanley and JPMorgan Chase & Co. expect the semiconductor giant – that has Apple, Nvidia and Qualcomm as its customers – to advance further amid surging AI-related revenue and strong pricing power. “Generative AI semi is an obvious growth driver for TSMC,” Morgan Stanley analysts including Charlie Chan wrote in a note last week. The company’s overseas expansion also helps mitigate geopolitical concerns, they said.TSMC’s revenue gained 9.4% in the first two months of 2024 as demand for high-end chips increased due to a wave of activity in AI.Nvidia gets ‘AI boost’This is not the first time this year that a chip company has seen its stock on an upward spiral. This year, Nvidia was among the companies that got a boost by a frenzy around generative AI.In the last month, Nvidia stock price has risen over 20% while in the last six months, it has risen over 90%. Moreover, in the last one year, Nvidia stock price has appreciated from $234.36 per share level to $875.28 per share mark – registering a 275% jump.