This week gave a split verdict. AI demand is still exceptional: TSMC grew revenue about 51% year over year and net income nearly 69%, guided Q4 revenue to 52.3 to 54.3 billion dollars at a 65% to 67% gross margin, and kept full-year capex at 60 to 64 billion dollars. Management called AI demand extremely robust, with a steep 2-nanometer ramp ahead. ASML confirmed the same chain with record Q3 sales and customers already asking about 2029 and 2030 orders.
At the same time inflation ran hot. September CPI came in at 3.7% and PPI jumped to 6.3% year over year, the 10-year spiked above 5.2% before reversing to around 5.1%, and the Nasdaq lost nearly 1.9% on CPI day. Reports of slowing AI lab revenue growth then hit chip and memory names even as TSMC printed a record.
My view: one sentiment shock does not cancel multi-year foundry demand, but crowded AI trades have little room for narrative shocks while yields stay this high. TSMC, SMH and SOXX remain core holdings for me, and the next checkpoints are the October 27-28 Fed meeting and next week's earnings.
I wrote the full weekly lookback, with the macro data and today's Fed and factory data, on my eToro profile:
https://med.etoro.com/aw.aspx?A=129366&Ta...af_page_v3
How are you positioned in TSM after the print?
At the same time inflation ran hot. September CPI came in at 3.7% and PPI jumped to 6.3% year over year, the 10-year spiked above 5.2% before reversing to around 5.1%, and the Nasdaq lost nearly 1.9% on CPI day. Reports of slowing AI lab revenue growth then hit chip and memory names even as TSMC printed a record.
My view: one sentiment shock does not cancel multi-year foundry demand, but crowded AI trades have little room for narrative shocks while yields stay this high. TSMC, SMH and SOXX remain core holdings for me, and the next checkpoints are the October 27-28 Fed meeting and next week's earnings.
I wrote the full weekly lookback, with the macro data and today's Fed and factory data, on my eToro profile:
https://med.etoro.com/aw.aspx?A=129366&Ta...af_page_v3
How are you positioned in TSM after the print?
