Reasons for the collective surge in TSMC, Broadcom, and NVIDIA

On Monday in the Eastern U.S., U.S. chip stocks collectively surged, with TSMC rising 5.15%, approaching a historical high. Meanwhile, AVGO surged 5.52%, NVDA surged 3.69%, and AMD also surged 4.52%.

The simultaneous surge in these four AI chip stocks ultimately stems from high expectations for AI achievements and economic impact in 2025. Additionally, for the U.S. stock market to continue climbing, AI must remain a driving force.

Specifically, next month, NVDA's product demonstrations at CES 2025 may bring new highlights and expectations to the industry. Moreover, NVDA is likely to launch its GB300 Blackwell AI server product line at its GTC conference in March 2025. On this basis, Morgan Stanley released a highly optimistic report on AI chips on Friday, emphasizing NVDA as the top pick for 2025. All of this will benefit NVDA's stock price.

As the sole manufacturer of high-end chips, TSMC has an extremely high moat. Its upcoming earnings and guidance are expected to show a 36% increase in December quarter sales, with gross margins reaching 58.3%, the highest level since 2022. Undoubtedly, this will also bring more market optimism and expectations. With these two positive outlooks and TSMC's reasonable valuation, the market naturally finds upward momentum.

Meanwhile, AVGO is also vigorously fueling the AI chip sector. According to the latest news, AVGO further explained its performance guidance, projecting AI chip revenue to reach $30 billion by 2027. Given the estimated market size of $60~90 billion by then, AVGO could capture 50% of the ASIC market share by 2028. Based on this, many major institutions have directly raised AVGO's target price and performance expectations.

As for AMD, its product line includes CPUs and GPUs, making it one of the most authentic and promising AI chip stocks. However, its valuation remains extremely low, creating a stark contrast that gives risk-takers ample reason to go long. If the company achieves a product breakthrough, its stock price could regain its former glory.

PS: The CEOs of these four companies are all Chinese. Their combined market capitalization exceeds the total market cap of all major Chinese internet companies, banks, insurers, securities firms, and liquor companies combined (mind-blowing).......

$NVIDIA(NVDA.US) $Broadcom(AVGO.US) $Taiwan Semiconductor(TSM.US)