Nvidia stock rose early on Thursday, with the artificial-intelligence chipmaker benefiting from strong earnings at its key supplier Taiwan Semiconductor Manufacturing Co. and fresh clarity around the Trump administration’s semiconductor tariff policy.
Nvidia stock was up around 3% at $188.38 in early trading, recovering some ground after falling 1.4% in the previous session.
The gains came as semiconductor stocks broadly advanced following results from TSMC that reinforced confidence in sustained AI-driven demand across the chip industry.
TSMC earnings boost chip sentiment
The chip sector received a notable lift after TSMC reported better-than-expected earnings and laid out an aggressive capital expenditure plan for the year ahead.
The world’s largest contract chipmaker said net income rose 35% from a year earlier, marking its eighth consecutive quarter of year-on-year profit growth.
Revenue for the October-December period climbed 20.5% to exceed NT$1 trillion for the first time.
The Taiwanese chipmaker said it expects to spend between $52 billion and $56 billion on capital expenditure this year, underscoring the scale of ongoing investment required to meet global demand for advanced semiconductors.
TSMC added that roughly 10% to 20% of its planned spending would be directed toward advanced packaging technology.
That investment is aimed at easing a key industry bottleneck affecting the supply of completed chip systems — a constraint that has been particularly relevant for customers such as Nvidia, which relies on complex packaging to deliver high-performance AI accelerators.
The announcement helped lift shares across the sector. Advanced Micro Devices rose about 3.5% in early trading, while Broadcom gained roughly 1.8%.
Tariff policy offers mixed signals
Nvidia’s rebound also came after President Donald Trump on Wednesday signed two executive orders imposing new tariffs on certain semiconductor imports.
Under the policy, a 25% import duty will apply to chips brought into the US that are not used domestically for artificial intelligence purposes and are instead exported to other countries.
The structure of the tariffs was seen as relatively favourable for Nvidia, as it preserves the pathway for exports of its H200 AI chips to China under US licensing rules.
The H200 is the most advanced AI chip Nvidia is currently allowed to sell into the Chinese market.
However, uncertainty remains on the other side of the Pacific.
Reuters has reported that Chinese customs authorities have instructed agents that H200 chips are not permitted to enter the country, and government officials have told domestic technology companies not to purchase the hardware unless absolutely necessary.
Those directives continue to cloud the outlook for Nvidia’s China sales, even as US policy appears to allow them.
Nvidia lags peers despite strong demand
While Nvidia remains one of the strongest-performing stocks over the past year — up about 38% — it has underperformed several of its AI-focused peers in recent months.
Alphabet is up roughly 77% over the same period, while Broadcom and AMD have climbed about 51% and 91%, respectively.
Nvidia stock has also traded largely sideways despite a steady stream of product launches, partnerships, and repeated assurances from management that demand for its AI chips remains robust.
The stock’s muted performance has reflected investor anxiety around China exposure, competition, and the sustainability of hyperscaler spending.
Some Wall Street analysts believe that caution may be overdone.
RBC bullish on Nvidia stock
On Wednesday, RBC Capital Markets initiated coverage on Nvidia with an Outperform rating and a $240 price target.
The firm cited several factors underpinning its positive outlook, including expectations that cloud capital expenditure will remain elevated over the next 12 to 18 months as major hyperscalers continue to compete aggressively on AI infrastructure.
RBC highlighted Nvidia’s reported backlog of more than $500 billion, rising demand for inference workloads, and accelerating adoption of AI across enterprise customers as key drivers of future growth.
The firm also downplayed competitive threats, pointing to Nvidia’s full-stack performance leadership, software ecosystem dominance, and balance sheet strength.
In valuation terms, RBC said Nvidia trades at roughly a 20% discount to both its semiconductor peers and the so-called Magnificent Seven technology stocks, a gap it views as unwarranted given the company’s positioning.
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