TSMC shares hit record high after Morgan Stanley lifts price target on client Nvidia on AI chip demand

shares of Taiwan Semiconductor Manufacturing Company It hit an all-time high on Thursday after Morgan Stanley lifted its price target. chip designer nvidiaCiting the continued growth in AI demand.

TSMC, the world’s largest producer of advanced processors, makes chips for companies like Nvidia and Apple,

Morgan Stanley on February 7 raised the price target for the US chip giant to $750 from $603, saying it saw a “very strong near-term picture.”

TSMC shares opened at a high of 709 New Taiwan dollars Thursday morning and closed at NT$697, about 8% higher than their previous close on Feb. 5. The Taiwan Stock Exchange resumed trading on February 15 after the Chinese New Year holiday.

Nvidia is one of the biggest beneficiaries of the AI ​​boom, which started last year on increased interest in generic AI following the launch of OpenAI’s ChatGPT in November 2022. ChatGPT went viral for its ability to generate human-like responses to users’ prompts.

Training large language models like ChatGPT requires a lot of graphics processing units. The chips need to be powerful enough to quickly crunch terabytes of data to recognize patterns. ChatGPT is trained and runs on thousands of Nvidia GPUs.

“The B100 transition is a significant near-term driver, impacting H100 lead times and competitive dynamics,” Morgan Stanley analysts wrote in a Feb. 7 report to clients.

According to analysts, Nvidia’s B100 GPU is expected to be an AI game changer that is even more powerful than its H100 AI processor.

TSMC currently makes 3-nanometer chips and plans to begin 2-nanometer mass production in 2025.

The term “nanometer” in chips refers to the size of individual transistors. Smaller nanometer sizes typically yield more powerful and efficient chips because more transistors can be packed into a single chip.

Shares of Taiwan’s Orient Semiconductor Electronics Ltd. also rose 10% on Thursday.