Nvidia Surges 2.15% as TSMC’s Earnings Signal AI Chip Demand Surge – What’s Next for the $4.5T Giant?

Summary
• Nvidia (NVDA) jumps 3.15% to $187.09, driven by TSMC’s $56B 2026 capex plan
• TSMC’s Q4 net profit soars 35%, signaling sustained AI chip demand
• Sector-wide semiconductor rally lifts peers like AMD (+2.4%)
• Trump’s 25% tariffs on advanced chips add near-term uncertainty

Nvidia’s 2.15% intraday gain reflects renewed confidence in AI infrastructure demand, fueled by TSMC’s bullish guidance. The stock’s surge aligns with a broader semiconductor sector rally, as TSMC’s $56B capital expenditure plan underscores long-term AI chip growth. However, regulatory headwinds like Trump’s tariffs and China’s import restrictions could test near-term momentum.

TSMC’s Capital Expenditure Surge Validates AI Chip Demand for Nvidia
Nvidia’s sharp intraday rally stems directly from TSMC’s Q4 earnings report, which revealed a $56B 2026 capital expenditure plan—surpassing 2025’s $41B. This signals sustained demand for AI chips, with TSMC’s manufacturing capacity tied to Nvidia’s order backlog. Analysts highlight that TSMC’s aggressive spending would only occur if Nvidia guaranteed consistent orders, reinforcing investor optimism. The stock’s 3.15% gain reflects this validation, as TSMC’s performance is viewed as a bellwether for Nvidia’s AI-driven growth trajectory.

Semiconductor Sector Rally Led by TSMC Fuels Nvidia’s Gains
The semiconductor sector surged alongside Nvidia, with Advanced Micro Devices (AMD) rising 2.4% as of 20:39 ET. TSMC’s earnings-driven rally in chip manufacturing tools (e.g., Applied Materials +6.2%) amplified sector-wide optimism. While Nvidia’s AI chip demand remains unmatched, peers like AMD benefit from the same AI infrastructure tailwinds. The sector’s 0.7% Nasdaq futures gain underscores broad-based confidence in AI-driven growth, though regulatory risks like Trump’s 25% tariffs on advanced chips could create near-term volatility.

Options Playbook: High-Leverage Calls on 187.5–190 Strikes Align with Bullish Momentum
• 200-day MA: 163.28 (well below current price)
• RSI: 35.01 (oversold territory)
• MACD: 0.51 (bullish divergence)
• Bollinger Bands: Price at 187.09 (above middle band of 184.76)

Nvidia’s technicals suggest a short-term bullish bias, with key support at 184.65 and resistance at 187.5. The 35.01 RSI indicates oversold conditions, while the MACD histogram’s -0.27 suggests weakening bearish momentum. Two options stand out for aggressive bulls:

• NVDA20260123C187.5
- Strike: 187.5, Expiry: 2026-01-23
- IV: 32.67% (moderate), Delta: 0.4857 (moderate sensitivity), Theta: -0.6119 (high time decay), Gamma: 0.0416 (high sensitivity to price moves), Turnover: $8.5M
- Payoff at 5% upside (196.44): $8.94/share
- High leverage (52.75%) and gamma make this ideal for a breakout above 187.5.

• NVDA20260123C190
- Strike: 190, Expiry: 2026-01-23
- IV: 31.20% (moderate), Delta: 0.3782 (moderate sensitivity), Theta: -0.5064 (high time decay), Gamma: 0.0416 (high sensitivity), Turnover: $17.8M
- Payoff at 5% upside (196.44): $6.44/share
- High liquidity and leverage (79.79%) position this as a core holding for a sustained rally.

Aggressive bulls should consider NVDA20260123C187.5 into a break above 187.5, while core positions in NVDA20260123C190 offer high leverage for a sustained move toward 190.

Backtest Nvidia Stock Performance
The backtest of NVDA's performance after a 2% intraday surge from 2022 to the present shows favorable results. The 3-Day win rate is 54.92%, the 10-Day win rate is 59.37%, and the 30-Day win rate is 64.38%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 15.53% over 30 days, suggesting that NVDA can offer significant gains even after the initial surge.

Nvidia’s AI-Driven Rally Gains Steam – Watch 187.5 Breakout for Next Leg Higher
Nvidia’s 2.15% intraday gain is a direct response to TSMC’s bullish guidance, validating AI chip demand. The stock’s technicals and options activity suggest a short-term bullish bias, with the 187.5 level acting as a critical inflection point. Sector peers like AMD (+2.4%) reinforce the AI infrastructure narrative, though regulatory risks like Trump’s tariffs remain a wildcard. Investors should monitor the 187.5 breakout for confirmation of a new upward trend, with NVDA20260123C187.5 offering high leverage for a potential 5% upside. Aggressive positioning in this strike could capitalize on the next phase of AI-driven growth.