Taiwan Semiconductor’s quarter renews confidence in AI stocks

CNBC’s Jim Cramer suggested Thursday that the company had a strong quarter this year. taiwan semiconductor Wall Street renewed confidence in artificial intelligence stocks, including industry leaders Nvidia.

“The Taiwanese cicada has thoroughly crushed the skeptics who have questioned the staying power of AI,” he said. “They said something we’ve only heard from NVIDIA CEO Jensen Huang: The demand is insatiable, and more importantly, the benefits could be huge for customers.”

Taiwan Semiconductor, the world’s largest contract chip maker, exceeded expectations, setting a new record and reporting a 35% increase in profits. The company has currently recorded eight consecutive quarters of year-on-year profit growth. Management indicated that there is still significant demand for the company’s products, which are used in advanced AI technology.

Kramer said Wall Street’s attitude toward AI had generally deteriorated recently. However, he continued, Taiwan Semiconductor’s strong financial results suggest that business is good for its customers as well, namely Nvidia.

Chip stocks led the market’s gains on Thursday, with major indexes ending higher. Taiwan Semiconductor Corporation hit a new 52-week high, rising 4.44%, while Nvidia rose 2.13%.

Cramer also identified other developments he felt were positive in Thursday’s session, including gains in banks and consumer stocks such as restaurants and retailers. He praised the rise of housing stocks, noting that the sector has suffered widespread downgrades recently. He also cited the “monstrous movement” in small-cap stocks, russell 2000 I managed to break through.

“But the change in Nvidia’s position as an eyesore for this market gives us hope that the bubble story may finally be over,” Cramer said. “At least for now.”

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Disclaimer CNBC Investing Club owns shares of Nvidia.