Why Nvidia stock is climbing fast after TSMC’s stellar quarter

Nvidia stock (NASDAQ: NVDA) saw a notable rise on Thursday amid a bullish momentum after Taiwan Semiconductor Manufacturing Co. (TSMC) reported a record third-quarter profit and raised its 2025 revenue outlook, driven by surging demand for AI-class chips.

The upbeat TSMC's Q3 earnings provided Nvidia stock with a boost as it reinforced expectations of strong factory orders for Nvidia’s data-center GPUs.

The traders seemed happy as the results reduced near-term supply worries and boosted confidence in AI-driven hardware spending among institutional and retail investors alike.

TSMC’s blowout quarter

TSMC just posted a blockbuster quarter. The chipmaking giant reported a net profit of NT$452.3 billion (about $14.7 billion), which is up a whopping 39% from last year and marks a new all-time high.

Revenue also jumped nearly 30% year-over-year to around $33.1 billion, easily beating Wall Street expectations.

Riding this momentum, TSMC lifted its 2025 revenue growth outlook to the mid-30% range in US dollar terms, with CEO C.C. Wei crediting “very strong” demand for AI chips.

And it’s no surprise, advanced chip nodes, the ones powering those AI data-center GPUs, now account for 74% of TSMC’s wafer revenue.

In short, the world’s most important chipmaker isn’t just benefiting from the AI boom; it’s fueling it.

This stellar performance signals that companies like Nvidia, which rely on TSMC’s cutting-edge production, are riding a powerful wave of AI-driven investment.

Why Nvidia benefits: capacity, demand and market psychology

TSMC’s strong outlook is great news for Nvidia stock, since the Taiwanese chip giant is the main foundry behind Nvidia’s most advanced GPUs.

In simple terms, when TSMC is thriving, it usually means Nvidia’s chip production and orders are in good shape too.

Right after TSMC posted its blowout results, Nvidia’s stock jumped around 1–1.5%, along with gains across the broader chip sector.

The upbeat guidance from TSMC helped calm any fears of a near-term slowdown in demand and reassured investors that Nvidia’s advanced chip orders are still rolling in strongly.

CEO C.C. Wei’s remark that AI demand remains “very strong” only added fuel to the bullish sentiment around Nvidia and the broader AI hardware space.

Looking ahead, investors are laser-focused on a few things: Nvidia’s next earnings and guidance, TSMC’s capital spending plans, and how quickly GPU shipments ramp up in the coming quarters.

The AI hardware boom has created a tight partnership between TSMC and Nvidia, and that connection is likely to stay crucial as global spending on AI infrastructure continues to surge.

This close partnership ensures Nvidia’s production remains aligned with cutting-edge manufacturing technology, which is crucial as AI demand intensifies.

Market participants will also monitor supply chain developments, wafer lead times, and any capacity expansions by TSMC that could further boost Nvidia’s growth and market sentiment in the competitive chip industry.