TSMC added $42 billion to its value and beat Visa - thanks to the "AI boom"

Shares of Taiwan's largest company soared by 7.9%, increasing its market capitalization to $575 billion.

As noted by Bloomberg, an additional $42 billion was enough to surpass Visa and take 12th place in the ranking of the world's most expensive companies. The biggest increase for TSMC in over a year came after Morgan Stanley raised its target price for the chip maker by about 9%.

Last week, TSMC reported a 7.9% increase in sales in January, indicating a long-awaited recovery in global demand for consumer electronics.

At the same time, investors continue to focus on companies that are expected to lead the wave of AI development activity, which has accelerated since OpenAI deployed ChatGPT. Nvidia's market capitalization has meanwhile grown to around $1.82 trillion, surpassing Amazon and Alphabet.

"Taiwan is thriving thanks to technology, especially in the field of artificial intelligence," says Sin-Yao Ng, investment director for Asian stocks at abrdn. "Nvidia has become a catalyst that has heightened sentiments after Jensen Huang visited Taiwan, increasing investors' appetite for AI ecosystems and Nvidia suppliers."

In January, TSMC executives stated that they expect to return to stable growth this quarter and announced an increase in capital spending in 2024, indicating that the world's most expensive chip maker anticipates a recovery in demand for smartphones and computers.