TSMC and ASML Stocks Decline Before Nvidia’s Earnings Announcement

Shares of two pivotal chip companies, TSMC and ASML, experienced a downturn ahead of the anticipated earnings report from Nvidia, a leading U.S.-based artificial intelligence chip designer.

Nvidia is scheduled to unveil its fourth-quarter earnings post the close of the U.S. market on Wednesday. Market analysts eagerly await insights from Nvidia CEO Jensen Huang, seeking clues regarding the sustainability of the company’s remarkable growth trajectory.

Taiwan Semiconductor Manufacturing Company (TSMC), renowned as the globe’s premier producer of advanced processors, saw its shares decline by over 1% on Wednesday morning. TSMC holds significance as a chip manufacturer for prominent entities like Nvidia and Apple.

Nvidia's AI chip demand triples
Nvidia’s AI chip demand triples, driving its shares to soar over the past year.

Meanwhile, the Nasdaq-listed shares of Dutch semiconductor equipment supplier ASML concluded Tuesday with a 2.09% decrease. ASML plays a crucial role in supplying essential machines, including the extreme ultraviolet lithography device vital for crafting the most cutting-edge chips globally, such as those featured in Apple’s iPhone.

Among other Taiwanese semiconductor firms, United Microelectronics Corporation and MediaTek registered slips of 0.91% and 0.31%, respectively, on Wednesday. The meteoric rise in demand for Nvidia’s graphics processing units, fueled by the AI surge, propelled its shares to more than triple in value over the past year.

Notably, ChatGPT, an AI chatbot celebrated for its human-like responses, gained prominence in November 2022, powered by Nvidia’s GPUs.

However, on Tuesday, Nvidia’s shares experienced a notable downturn of 4.35%, spearheading a broader retreat in U.S. tech stocks. Concurrently, Arm Holdings, the U.K.-based chip designer under SoftBank’s ownership, witnessed a 5.12% decrease in its shares.

Morgan Stanley anticipates a strong Nvidia quarter
Morgan Stanley anticipates a strong Nvidia quarter, emphasizing investor optimism and cautious expectations.

In a report issued on Tuesday, Morgan Stanley expressed optimism about Nvidia’s forthcoming quarter, aligning with recent upward revisions to expectations. The report emphasized the anticipation surrounding Nvidia’s new product launches.

Morgan Stanley analysts noted, “With the stock up over 50% [year-to-date] already, we aren’t expecting an immediate robust reaction to positive results, yet we don’t foresee a significant sell-off either.

Our discussions with investors predominantly reveal constructive sentiments toward the stock, albeit with concerns regarding potentially lofty near-term expectations, a dynamic that typically sets a benign stage.”

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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