Nvidia stock was modestly higher on Friday, extending gains from the previous session as strong earnings from key supplier Taiwan Semiconductor Manufacturing Co. reinforced confidence in sustained demand for advanced artificial intelligence chips.
Nvidia shares rose 0.4% to $187.25 in early trading, following a 2.1% advance on Thursday.
The recent move comes after several months of largely sideways trading, as investors balance signs of robust end demand against concerns over competition and geopolitical constraints.
TSMC results lift sentiment across chip sector
The latest boost for Nvidia came from a strong quarterly report by Taiwan Semiconductor Manufacturing, the world’s largest contract chipmaker and Nvidia’s primary manufacturing partner.
TSMC said net income rose 35% from a year earlier in the October–December period, marking its eighth consecutive quarter of year-on-year profit growth.
Revenue climbed 20.5% in the quarter, surpassing NT$1 trillion for the first time, highlighting the scale of global demand for advanced semiconductors tied to artificial intelligence, high-performance computing, and data-center expansion.
Looking ahead, TSMC said it expects to spend between $52 billion and $56 billion on capital expenditure this year.
The company added that around 10% to 20% of that spending would be allocated to advanced packaging technology, an area that has emerged as a critical bottleneck for delivering complete AI systems.
That investment is particularly relevant for customers such as Nvidia, whose most advanced accelerators rely on complex packaging to integrate multiple chips and memory components into a single system.
Nvidia stock struggles to break out
Despite the supportive industry backdrop, Nvidia’s stock has struggled to regain sustained upward momentum.
Shares have largely traded sideways for the past three months, reflecting investor concerns that the company could face rising competition in the AI accelerator market.
One key worry has been the potential loss of market share to Google’s internally developed Tensor Processing Units, which are designed to reduce reliance on third-party suppliers for certain AI workloads.
Investors are also watching the progress of next-generation chips from Advanced Micro Devices, which has been gaining traction with hyperscalers seeking to diversify suppliers.
Those competitive dynamics have weighed on Nvidia’s valuation in recent months, even as the company has continued to announce new products, partnerships, and strong order visibility.
Jefferies raises target on Nvidia stock
Some analysts remain firmly bullish. Jefferies raised its price target on Nvidia to $275 from $250 while maintaining a Buy rating.
The firm said that while it expects estimate revisions for Nvidia to be less dramatic than for Broadcom, it still anticipates “material beats and raises with estimates moving higher over the next several quarters.”
Jefferies continues to view Broadcom as its top pick in the sector, modelling calendar-year 2028 earnings per share above $19 and suggesting upside toward $25 per share based on what it described as conservative assumptions for OpenAI and Meta-related demand.
Even so, the firm’s higher target for Nvidia reflects confidence that the company will continue to benefit from expanding AI infrastructure spending.
China bottleneck remains a key overhang
Geopolitics and access to chips remain a major uncertainty for Nvidia. After a year of headlines highlighting China’s rapid progress in artificial intelligence, some leading Chinese AI researchers are striking a more cautious tone.
According to a report by The Wall Street Journal, several elite Chinese researchers have concluded that China’s chances of catching up to the US in the near term are limited due to a persistent bottleneck in advanced chips.
Tang Jie, founder of Chinese AI startup Zhipu, said at a conference in Beijing last weekend that the gap may be widening.
“The truth may be that the gap is actually widening,” Tang said. “While we’re doing well in certain areas, we must still acknowledge the challenges and the disparities we face.”
The report added that Chinese companies have begun discussing renting computing power at data centres in Southeast Asia and the Middle East to gain access to Nvidia’s upcoming Rubin chips.
That follows similar efforts last year to access Nvidia’s Blackwell-series chips through third countries.
Such arrangements are generally viewed as legal but are cumbersome, often leaving Chinese developers with fewer chips and higher costs compared with well-funded US competitors.
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