4 chip companies further fueling the AI surge

The AI Boom Continues: Semiconductor Leaders Drive Growth

The momentum behind artificial intelligence remains strong, with major semiconductor companies such as TSMC playing a pivotal role in this ongoing trend.

Victoria Fernandez, chief market strategist at Crossmark Global Investments, shared with Yahoo Finance's Opening Bid that the latest earnings results reinforce the belief that the AI surge is far from over.

Fernandez noted that the recent shift away from Big Tech stocks may be slowing. While some investors had anticipated a widespread move out of the so-called "Magnificent Seven," robust earnings from semiconductor firms suggest the AI sector still has significant momentum.

Other notable companies to keep an eye on include ASML, Applied Materials, and Lam Research, all of which have reported impressive financial results, according to Fernandez.

This renewed confidence stems from a fundamental change in how investors perceive the essential hardware providers of the AI age. For months, there were concerns that the demand for AI might be unsustainable. However, recent performance from these four industry leaders—who supply the core technology for major tech firms—shows increasing capital investment, widening profit margins, and steady revenue growth.

At the forefront is TSMC, recognized as the world’s leading chip manufacturer, supplying advanced semiconductors to industry giants like Nvidia, Apple, and AMD.

TSMC CEO C.C. Wei and Nvidia CEO Jensen Huang at TSMC's annual sports day in Hsinchu, Taiwan, Nov. 8, 2025. (REUTERS / Reuters)

TSMC’s Record-Breaking Quarter

TSMC started the year with outstanding fourth-quarter results. The company reported $33.73 billion in revenue, marking a 25% increase compared to the previous year and surpassing Bloomberg’s consensus estimate of $32.8 billion. Earnings per share reached $3.15, up 8% year-over-year and beating the expected $2.90. Over the past year, TSMC’s stock price has soared by more than 70%.

TSMC also revealed plans to allocate up to $56 billion in capital expenditures for 2026. Fernandez interprets this bold investment as a strong signal that the world’s largest tech companies are ramping up their infrastructure commitments rather than scaling back.

Ripple Effects Across the Semiconductor Industry

This extended period of heavy investment has also boosted other key suppliers. ASML, the exclusive provider of lithography equipment essential for producing advanced AI chips, saw its market capitalization exceed $500 billion following TSMC’s announcement. ASML shares have climbed over 80% in the last year.

Premarket trading reflected this optimism, with Applied Materials and Lam Research shares rising 8% and 6%, respectively. These firms form the foundational infrastructure necessary for future AI software advancements.

Specialized Components Take Center Stage

As investors increasingly focus on specialized hardware rather than just the largest tech names, these AI-related companies may be just beginning their ascent.

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