This article first appeared on GuruFocus.
Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) shares rose 1.24% in pre-market after the company reported strong sales growth at the start of the year. The company said revenue for January and February totaled NT$718.9 billion ($22.6 billion), up 30% from a year earlier. February sales increased 22% year over year, though the comparison was affected by the timing of the Lunar New Year, which fell in January 2025 and shifted production schedules.
TSMC manufactures chips for companies including Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), and Broadcom (NASDAQ:AVGO) and is often seen as a barometer for global semiconductor demand, particularly in artificial intelligence infrastructure.
The figures capture demand through February, before the US-Israel strike on Iran introduced new uncertainty around the pace of global data center construction, particularly in the Gulf region. Major technology companies including Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Meta Platforms (NASDAQ:META), and Microsoft (NASDAQ:MSFT) have collectively earmarked more than $650 billion in capital spending this year to expand AI infrastructure. At the same time, investors continue to debate whether the rapid buildout could eventually lead to overcapacity as the industry scales.
