The semiconductor industry experienced a rebound led by Nvidia Corporation and Advanced Micro Devices after a setback on Thursday due to the high demand for artificial intelligence technology. Taiwan Semiconductor Manufacturing Co. also received government approval for additional funding to build new factories in Japan and Arizona, using advanced process technologies.
TSMC’s second factory in Arizona will upgrade its technology to 2 nanometers, while the new factory in Kumamoto, Japan, will produce chips ranging from 6 nanometers to 40 nanometers. Nvidia’s success in AI chips was attributed to a strategic decision made over a decade ago, and they emphasized their “lowest total cost of ownership” at a recent shareholder meeting. TSMC is exploring advanced chip packaging to take advantage of the growing AI market, with major customers like Nvidia and AMD already reserving capacity until 2026.
Nvidia stock has risen by 205% in the past year, while AMD stock has seen a 48% gain. Investors can access Nvidia through ETFs like Vanguard Information Tech ETF and iShares S&P 500 Growth ETF. As of Friday, NVDA shares were at $124.02, and AMD shares were at $162.90.
When considering a stock for long-term investment, it’s important to analyze future earnings expectations and performance compared to a benchmark index. AMD’s revenue has grown at an average annual rate of 35.99% over the past 5 years, and analysts have an average 1-year price target of $195.64, indicating a projected upside of 20.58% in 2025. While past performance is not indicative of future results, AMD has outperformed the S&P500 index by 13.83% annually, with a return of 22.35%.
Overall, the semiconductor industry is thriving, with companies like Nvidia, AMD, and TSMC leading the way in technological advancements and strategic investments for future growth.
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