Artificial intelligence chipmakers Nvidia (NASDAQ:NVDA), Broadcom (NASDAQ:AVGO), Advanced Micro Devices (NASDAQ:AMD), Marvell Technology (NASDAQ:MRVL), and Super Micro Computer (NASDAQ:SMCI) rebounded on Wednesday following a brief profit-taking selloff.
This recovery was fueled by an upbeat quarterly earnings report from chipmaking equipment giant ASML Holding (NASDAQ:ASML) and renewed market optimism surrounding contract chipmaker Taiwan Semiconductor Manufacturing Co.’s (NYSE:TSM) upcoming earnings, despite lingering geopolitical concerns between Washington and Beijing.
ASML’s Strong Quarterly Earnings
ASML reported stronger-than-expected third-quarter results, with net bookings reaching 5.4 billion euros ($6.27 billion), topping the 5.36 billion euros ($6.23 billion) consensus, and net sales reaching 7.5 billion euros ($8.71 billion).
The company reported a gross margin of 51.6% and a net income of 2.1 billion euros ($2.44 billion), driven by the adoption of AI, EUV lithography, and advanced packaging tools, while collaborating with Nvidia-backed Mistral AI.
ASML projects fourth-quarter 2025 sales between 9.2 billion euros ($10.69 billion) and 9.8 billion euros ($11.39 billion), with a gross margin of 51%–53%.
The company expects full-year 2025 sales growth of 15%, and a gross margin of around 52%. CEO Christophe Fouquet cautioned that China sales will likely decline in 2026 following strong demand in 2024 and 2025 but said overall revenue will remain stable.
Taiwan Semiconductor’s Revenue Outlook
Analysts are forecasting robust third-quarter results for Taiwan Semiconductor, projecting revenue of $31.50 billion, up from $23.50 billion a year ago, and earnings per share of $2.59.
The company has surpassed analyst estimates for both revenue and EPS in seven consecutive quarters and anticipates third-quarter revenue between $31.8 billion and $33.0 billion.
In the second quarter, Taiwan Semiconductor reported a 44% revenue increase and a 540-basis-point expansion in gross margins to 58.6%, further bolstering investor confidence.
CEO C.C. Wei emphasized the company’s U.S. manufacturing investments and the recent U.S. approval allowing Nvidia to resume AI chip sales to China. While cautioning on potential tariff risks, Wei noted that customer behavior has not shifted in response to geopolitical pressures.
Strategic Partnerships and AI Investments
Meanwhile, AI chip companies are actively forging partnerships to capitalize on growing demand. AMD announced a multi-year deal with OpenAI to provide up to six gigawatts of computing capacity with its next-generation Instinct MI450X GPUs starting in late 2026, a deployment expected to generate over $100 billion in revenue over four to six years.
Broadcom is also collaborating with OpenAI, deploying 10 gigawatts of custom AI silicon and rack-level systems that integrate compute ASICs with Ethernet, PCIe, and optical connectivity solutions. These initiatives aim to scale next-generation AI technologies across networking silicon and server infrastructures.
OpenAI has pledged over $1.5 trillion in semiconductor and infrastructure investments over the next decade, including $300 billion for data center expansion in partnership with Oracle (NYSE:ORCL).
These moves are unfolding amid heightened U.S.-China tensions, including U.S. sanctions on semiconductor and AI technologies and Chinese restrictions on rare earth exports.
Nvidia has benefited from this surge in demand, becoming the first company to reach a $4.5 trillion market capitalization in early October, fueled by strong sales of its graphics processing units to Big Tech.
Super Micro has also launched its Data Center Building Block Solutions (DCBBS), allowing organizations to design and deploy complete data centers through a single vendor. DCBBS leverages AI and accelerated compute technologies from Nvidia, AMD, and Intel (NASDAQ:INTC) to optimize efficiency and support diverse workloads.
NVDA Price Action: NVDA shares were trading higher by 2.26% to $184.09 at last check Wednesday.
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