Nvidia's stock experienced a decline on January 16th, as investors weighed the implications of Taiwan Semiconductor Manufacturing Company's (TSMC) latest earnings report. TSMC, a key supplier for Nvidia, announced a 57% increase in net income for the fourth quarter, driven by robust demand for AI chips. The company projected a 25% revenue growth for 2025, largely fueled by AI-related demand. However, concerns emerged regarding Nvidia's potential scaling back of orders for TSMC's advanced packaging technology, despite TSMC's CEO C.C. Wei dismissing such rumors and affirming that demand continues to rise.
TSMC's announcement of a 41% increase in capital expenditures to address growing demand for AI and advanced chips further highlighted the sector's growth potential. Yet, Nvidia's stock faced pressure amid speculation about the sustainability of the AI boom and the impact of new U.S. export controls on AI chips. TSMC indicated that these controls would have minimal impact on its operations, but investor sentiment remained cautious.
Nvidia (NVDA) shares closed at $133.57, down 1.96% from the previous close of $136.24 on January 15th.