Taiwan Semiconductor Manufacturing Company (TSMC) saw its U.S.-listed shares surge 6% on Wednesday, driven by a wave of optimism following Advanced Micro Devices’ (AMD) blockbuster first-quarter earnings. The rally underscores the market’s conviction that the artificial intelligence boom is still in its early innings, with chip foundries and designers positioned at the heart of a multi-year expansion cycle.
AMD’s Q1 Beat Sparks Rally
AMD reported revenue of $10.25 billion, comfortably above Wall Street’s $9.9 billion estimate, while earnings per share came in at $1.37 versus the $1.28 consensus. The standout figure was datacenter revenue, which hit $5.78 billion—up 57% year-over-year—fueled by explosive server CPU demand. CEO Lisa Su attributed the performance to “accelerating demand for AI infrastructure” and forecast that server growth would continue to strengthen as supply expands. For the second quarter, AMD guided revenue to $11.2 billion, far exceeding the Street’s $10.5 billion estimate.
TSMC: The Critical AI Bottleneck
As the world’s largest pure-play semiconductor foundry, TSMC manufactures cutting-edge chips for AI leaders like AMD and Nvidia. Its advanced nodes are already operating near full utilization, and the company has stressed that AI demand remains “extremely robust.” TSMC expects 2026 capital expenditure to stay at the upper end of guidance, reflecting ongoing investments in expanding production lines. Investors are increasingly concerned that physical manufacturing limits could become a bottleneck for the entire AI ecosystem, a fear amplified by AMD’s projection of 35% compound annual server CPU growth through 2030.
Wall Street Piles In
Analysts reacted swiftly. Goldman Sachs upgraded AMD to Buy with a $450 price target, citing agentic AI as a structural tailwind. Bernstein lifted its target from $265 to $525 and now models AMD earning over $14 per share in 2027, potentially approaching $20 in 2028. Seaport Research initiated coverage with a Buy and $430 target, while Robert W. Baird went as high as $625. More than 54 million AMD shares changed hands, nearly double the three-month average.
GPU Partnerships Add Fuel
Strategic GPU deployments with Meta and OpenAI, totaling 6 gigawatts of AMD GPUs, further buoyed sentiment. Goldman Sachs flagged the Meta deployment as particularly compelling, and Bernstein noted that AMD’s two anchor GPU customers are “set to ramp into year-end,” a factor not yet fully reflected in Street models.
While the news is primarily a traditional markets story, the unmistakable signal of accelerating AI infrastructure spending ripples across the crypto landscape, where numerous decentralized AI projects and GPU-focused mining tokens may see renewed attention as the AI megatrend solidifies.
