The S&P 500 advanced 0.7% to 5,382.45, closing within 0.3% of its record high, driven by optimism following Taiwan Semiconductor Manufacturing Co.'s (TSMC) upbeat guidance. The chipmaker's projection of 20% revenue growth in 2026, fueled by rising demand for AI-optimized semiconductors, sparked a broad tech rally.
- S&P 500 reached 5,382.45, within 0.3% of its all-time high
- TSMC projected 20% revenue growth in 2026, driven by AI chip demand
- AI-related chip orders represent 45% of TSMC’s Q4 revenue
- TSMC plans $18 billion in new investments across U.S. and Japan by 2029
- Nvidia’s market cap exceeded $2.9 trillion, second-largest U.S. company
- Tech sector weight in S&P 500 rose to 28.4%, highest since 2022
The S&P 500 climbed to 5,382.45 on Thursday, marking its highest level since the index’s prior peak in late 2023, and closing within 0.3% of a new record. The advance was fueled by stronger-than-expected guidance from Taiwan Semiconductor Manufacturing Co. (TSMC), which reported a projected 20% year-over-year increase in 2026 revenue amid robust demand for advanced logic chips used in artificial intelligence systems. TSMC’s outlook, issued during its Q4 earnings call, highlighted a 35% surge in demand for 3nm and 2nm process technologies, with AI-related chip orders accounting for 45% of total revenue in the quarter. The company also confirmed plans to invest $18 billion in new fabrication capacity in the U.S. and Japan over the next three years, reinforcing its strategic positioning in the global semiconductor supply chain. The broader tech sector responded decisively, with the Nasdaq Composite gaining 1.1% and Microsoft, Nvidia, and Broadcom each rising more than 1.5%. Nvidia, in particular, saw its market cap exceed $2.9 trillion, making it the second-largest company in the U.S. by valuation. The momentum extended to semiconductor equipment suppliers, with ASML Holding and KLA Corporation closing up 2.2% and 2.7%, respectively. Investors are increasingly viewing TSMC’s performance as a leading indicator of AI infrastructure spending. The company’s ability to maintain high utilization rates—currently at 97% across its advanced nodes—suggests sustained demand that may extend into 2027. This confidence has led to a 14% year-to-date gain in the S&P 500 info-tech sector, outpacing the broader market. As a result, the technology sector’s weight in the S&P 500 rose to 28.4%, the highest since mid-2022, reflecting growing market concentration in AI-driven growth stories.