Nvidia Stock Expected to Soar in H2 2025 as Taiwan Semiconductor Manufacturing Reports Strong Q2 Results and Raises 2025 Forecast

Nvidia investors are taking a more measured approach due to concerns about AI growth prospects and sales in China. However, Taiwan Semiconductor Manufacturing's second-quarter results indicate strong AI demand, with revenue up 39% YoY and EPS surging 61%. TSMC raised its 2025 forecast, expecting full-year revenue to climb 30% in US dollars. This suggests that the AI revolution is sustainable, which could bode well for Nvidia.

Taiwan Semiconductor Manufacturing Company (TSMC) reported robust second-quarter (Q2) results, indicating strong demand for artificial intelligence (AI) chips. The company's net revenue in the June quarter rose 38.65% from a year ago to NT$933.80 billion, surpassing estimates [1]. This growth was driven by the high-performance computing (HPC) division, which contributed 60% of the revenue, up from 52% in the same period last year [1].

TSMC's CEO, C.C. Wei, noted that the primary driver of growth was the robust demand for AI-related chips, particularly for leading-edge nodes below 7 nanometers (nm) [1]. Advanced chips, with sizes 7nm or smaller, accounted for 74% of TSMC's total wafer revenue in the quarter [1].

The company's forecast for third-quarter revenue was between $31.8 billion and $33.0 billion, representing a 38% year-over-year increase and an 8% increase from the prior quarter [1]. TSMC expects its full-year 2025 revenue to rise by around 30% in U.S. dollar terms, supported by growth in AI and demand for its most advanced technologies [1].

TSMC's shares were up over 4% at 4:30 a.m. ET on trading platform Robinhood, reflecting investor confidence in the company's performance and outlook [1]. The stock also gained over 20% year-to-date and 57% in the last three months [2].

The strong Q2 results from TSMC suggest that the AI revolution is sustainable, which could bode well for Nvidia investors. While concerns about AI growth prospects and sales in China have led Nvidia investors to take a more measured approach, TSMC's results indicate that the demand for AI chips remains robust [3]. This could bolster Nvidia's prospects, as the company is a key supplier of graphics processing units (GPUs) to TSMC.

However, there are potential headwinds for TSMC, including the Trump administration's trade policies and tariffs on Taiwan. TSMC's Chairman, C.C. Wei, acknowledged these uncertainties but noted that the company had yet to see any changes in customer behavior so far [2].

References:
[1] https://www.cnbc.com/2025/07/17/tsmcs-second-quarter-profit-soars-nearly-61percent-as-ai-chip-demand-stays-strong-.html
[2] https://www.benzinga.com/markets/earnings/25/07/46462634/nvidia-supplier-taiwan-semiconductor-on-a-roll-profit-explodes-with-strong-margin-growth
[3] https://cryptorank.io/news/feed/d1f81-taiwan-semiconductor-raises-2025-outlook-tsmc-stock-pops