Taiwan Semiconductor surges to hedge against ASML short positions, will NVIDIA hit a new high tonight?

Recently, driven by economic data such as non-farm payrolls, the US stock market has continued to hit new highs, with the Dow Jones Industrial Average rising for 5 consecutive weeks and the S&P 500 hitting new highs for 5 consecutive weeks, leading to a continuous increase in US stock market valuations. Heavyweight stocks such as Taiwan Semiconductor, Apple, Meta, etc., have also reached new highs.

NVIDIA, known as one of the most important stocks in the world, influences the overall sentiment of the US stock market. After hitting a new high on June 20th, its stock price fluctuated for 4 months. With the support of Taiwan Semiconductor, it may reach a new high in the near future.

Today, Taiwan Semiconductor surged 8% in pre-market trading, with Q3 performance exceeding expectations. The outlook is also better than expected: Q3 net revenue was NT$759.69 billion, a 39% year-on-year increase; Q3 net profit was NT$325.3 billion, surpassing the market's expected NT$299.3 billion, a 54% year-on-year increase.

It is expected that the fourth-quarter revenue will be between $26.1 billion and $26.9 billion, with the market estimating $24.94 billion; the fourth-quarter gross margin is expected to be between 57% and 59%, with the market estimating 54.7%.

Bloomberg analyst Charles Shum stated:

Although ASML previously reported that its third-quarter order volume was only half of the expected level, implying a possible slowdown in global semiconductor manufacturing capacity growth, Taiwan Semiconductor's short- to medium-term revenue outlook remains robust.

The strong demand from NVIDIA, AMD, Apple, and Qualcomm for Taiwan Semiconductor's 2nm and 3nm technologies has offset this shortfall. Taiwan Semiconductor's outstanding production yield, continuously improving EUV machine production rate, and leading position in the 2.5D and 3D packaging fields further support sales.

Driven by Taiwan Semiconductor, semiconductor stocks rose before the market opened, with NVIDIA and AMD rising by more than 3% at one point, and the Direxion Semicon Bull 3X ETF (SOXL) rising by over 7%.

Stanley Druckenmiller, the billionaire investor with a net worth of about $6.9 billion and founder of the Duquesne Family Office, stated on Wednesday that his decision to sell NVIDIA shares earlier this year was a "major mistake":

"In my investment career, I have made many mistakes, one of which is selling all of NVIDIA at around $800-950 (i.e. $80-95 after the split)."

However, as the saying goes, opportunities come from declines, and risks come from rises. Some industry insiders believe that with the recent continuous highs in the US stock market, the upcoming US election, and the intensification of geopolitical risks, the US stock market may face certain volatility risks