Taiwan Semiconductor’s quarter renewed faith in AI stocks

CNBC’s Jim Cramer predicted a strong quarter on Thursday Taiwan Semiconductor Wall Street’s renewed faith in AI stocks, including industry leader Nvidia.

“Taiwan Semi has made mincemeat of skeptics who doubt the staying power of AI,” he said. “They said something we’ve only heard from Nvidia’s CEO, Jensen Huang, that demand is insatiable and, more importantly, profits can be huge for customers.”

Taiwan Semiconductor, the world’s largest contract chipmaker, reported a 35% profit increase, beating forecasts and setting a new record. The company has now posted eight consecutive quarters of profit growth on an annual basis. Management stated that there is still high demand for its products used for advanced artificial intelligence technology.

Cramer said Wall Street has been greatly negatively impacted by AI lately. But Taiwan Semiconductor’s successful earnings show that business is also strong for customers, namely Nvidia, he continued.

Chip stocks led the market higher on Thursday, while major indexes finished in the green. Taiwan Semiconductor gained 4.44%, reaching a 52-week high, while Nvidia gained 2.13%.

Cramer also highlighted other actions he considered positive during Thursday’s session; these include gains in banks and consumer-focused stocks like restaurants and retailers. He praised the rise of housing names and stated that the sector has been generally affected by rating downgrades recently. He also talked about the “monster move” in small-cap stocks. Russell 2000 He managed to escape.

“But the turnaround at Nvidia, which has become a prominent part of this market, is what gives me hope that the bubble talk may have finally served its purpose,” Cramer said. “At least for now.”

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Disclaimer CNBC Investment Club owns shares of Nvidia.