PNC Financial Services Group Inc. will fulfill its goals for expanding across Colorado with the planned takeover of FirstBank Holding Co., and the regional-banking giant will focus its branch-opening effort on other states instead, PNC Chief Executive Officer Bill Demchak said. Pittsburgh-based PNC agreed to buy FirstBank for about $4.1 billion to add $26.8 billion […]
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The Square Enix team behind Final Fantasy Tactics — The Ivalice Chronicles didn’t just remaster the iconic strategy RPG, they had to go through the trouble of remaking the source code from scratch, according to Bloomberg. In an interview with Bloomberg‘s Jason Schreier, the game’s director Kazutoyo Maehiro explained the arduous process of designing The Ivalice Chronicles, which is set to release at the end of the month.
When getting to work on the remake, Maehiro and his team discovered they had to rebuild the source code from the ground up since it was lost thanks to the industry’s unstandardized practices in the ’90s, according to Bloomberg. When translating Final Fantasy Tactics from Japanese to English for the global release, the company would overwrite the original Japanese version’s code. For Maehiro, that meant the team had to undertake a ground-up overhaul and recreate the source code by playing the original game that released in 1997, consulting the game’s master disc and looking at the 2011 version called Final Fantasy Tactics: The War of the Lions, according to Bloomberg. Maehiro also said during a PAX West 2025 panel that the team gleaned a lot of lost info from fan-made databases.
Revealing more of the behind-the-scenes decisions for The Ivalice Chronicles, Maehiro told Bloomberg about the debate surrounding Count Cidolfus Orlandeau. Better known as Cid, and appropriately nicknamed Thunder God Cid, this overtuned character joins you later in the game, but many fans complained about him being overpowered. Instead of nerfing Cid, Maehiro told Bloomberg that keeping this character’s power level the same would better represent the storyline since “his role in the story is being that very powerful character who joins your party.” To quell any concerns of Cid being too broken, Maehiro told Bloomberg that the team decided to buff the other characters to even things out. Looking ahead, Maehiro also hinted at exploring sequels for the Final Fantasy Tactics franchise or even brand new games in the strategy RPG genre, given that The Ivalice Chronicles does well, according to Bloomberg.
Jackson Chen
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Trimont LLC, a global commercial real estate loan servicing company, is using JPMorgan Chase & Co.’s blockchain platform to help speed up and automate loan payments, as more companies look to crypto’s underlying technology as alternative rails for money movement. The Atlanta-based company — which manages around $730 billion in loans — used JPMorgan’s Kinexys […]
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Cambricon Technologies Corp. swung to a record profit in the first half, reflecting a wave of demand for Chinese chips after Beijing encouraged the use of homegrown technology in a post-DeepSeek AI boom.
The Chinese AI chip designer, which competes with Huawei Technologies Co. to provide accelerators for developing and hosting AI models, posted a 1.03 billion yuan profit ($144 million) versus a year-earlier loss of 533 million yuan. That’s off a roughly 44-fold surge in revenue to 2.9 billion yuan. Its shares climbed more than 8% in Shanghai.
The results underscore how startups and big tech firms like Alibaba Group Holding Ltd. are increasingly employing domestic alternatives to Nvidia Corp. as the pace of AI development intensifies. The Chinese authorities have urged local agencies to use homegrown chips, citing security concerns as well as persistent uncertainty over the Trump administration’s export curbs.
That’s lifted sentiment toward chipmakers amid rising geopolitical tensions and supply chain disruptions. Cambricon—one of the largest listed AI chip designers—has doubled its market value to $80 billion this month alone. That’s after becoming China’s top performing stock of 2024, riding investor enthusiasm over government support for local tech. On Tuesday, the State Council reaffirmed support for AI adoption as well as the development of intelligent vehicles and robots—all of which require AI processors.
“Amid U.S. restrictions on China’s AI sector, government support for leading domestic firms is essential to drive growth and replace imported chips,” said Ma Cheng, chairman of Shenzhen Juze Investment Management Co. “Such protection is necessary, and Cambricon’s growth is far from temporary.”
Chip shares have led gains in the recent China stock market boom as investors grow more optimistic about the country’s AI prospects and DeepSeek’s latest model update, which it said was tailored to work with next-generation homegrown AI chips.
Despite the strong results, Cambricon acknowledged intensifying competition in the AI chip sector, with only Nvidia maintaining an absolute advantage in the market. That’s as the US government allows Nvidia and Advanced Micro Devices Inc. to resume sales of certain lower-end chips to the country.
To shore up its base, Cambricon said it’s expanded support for DeepSeek, Alibaba’s Qwen and Tencent Holdings Ltd.’s Hunyuan models. It also announced a 4 billion yuan private placement in July to fund its large-model chip platform.
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Visa Inc. shut its open-banking business in the US amid regulatory uncertainty about consumer-data rights and the prospect of higher fees for customer information, according to people familiar with the matter. The payments company has closed its open-banking operations, which provide technology to help third parties such as financial-technology firms access customer-account data, the people […]
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The US Consumer Financial Protection Bureau is seeking answers to questions around bank fees and customer authorization as it reshapes a rule governing personal-finance information after JPMorgan Chase & Co. proposed charging outside parties to access the data. The CFPB is asking stakeholders — banks, financial-technology companies, data aggregators and other interested parties — to […]
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Federal Reserve Governor Christopher Waller called to embrace the “technology-driven revolution” taking place in artificial intelligence and stablecoins as a way to boost the US economy, although some critics may be skeptical of all the hype. “The technologies available today might be new, but leveraging innovative technology to build new payment services is not a […]
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Leading crypto wallet provider MetaMask is launching its own stablecoin in partnership with payment giant Stripe Inc.’s stablecoin arm, Bridge, and decentralized stablecoin platform M0. MetaMask is a self-custodial crypto wallet developed by Consensys, a software company focused on building products tailored to the Ethereum blockchain. MetaMask counts more than 100 million users annually and […]
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Intel has had some recent struggles in delivering results for its shareholders, but the company could soon be answering to an additional boss. The current administration is reportedly in talks to have the US government acquire a stake in the chipmaker. Bloomberg first reported the news without specifics about the size or value of the potential share the government wants to buy. According to a newer report by Bloomberg and The New York Times, the Trump administration is looking to take a 10 percent stake in Intel as part of its efforts to give domestic chip manufacturing a boost.
The administration is reportedly considering converting the $10.86 billion in federal grants Intel is getting from the US Chips and Science Act into equity instead. It’s still early days, and the White House is still deciding on the exact size of the stake. Intel initially shared plans to construct a semiconductor facility in Ohio in 2022 while Pat Gelsinger was still at the helm of the company. Since then, the project has faced delays, and at its latest quarterly earnings report, execs said Intel would “slow the pace” on the Ohio construction, as well as scrapping other international building plans and making workforce cuts.
The potential for government ownership of Intel is the latest swing of the administration’s attitude toward the company. A few days after calling for his resignation over connections to China, President Donald Trump met with CEO Lip-Bu Tan and seemed to now hold a more positive outlook on the company leader.
A representative from Intel told Bloomberg in a statement that the company is “deeply committed to supporting President Trump’s efforts to strengthen US technology and manufacturing leadership. We look forward to continuing our work with the Trump administration to advance these shared priorities, but we are not going to comment on rumors or speculation.”
Update, August 18 2025, 10:31AM ET: This story has been updated to include new reports that the Trump administration is looking to take a 10 percent stake in Intel.
Anna Washenko
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Oracle Corp. is cutting jobs in its closely watched cloud unit, the latest company taking steps to control costs amid heavy spending on AI infrastructure. Impacted workers were told this week that their roles were eliminated, according to people familiar with the matter. Some of the reductions were related to performance issues, and the unit […]
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SAN FRANCISCO, July 21, 2025 (Newswire.com)
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(Bloomberg) — BCE Inc. will pause dividend growth next year as it makes an unexpected push into the US with the purchase of an internet provider in the Pacific Northwest, a move that sent the company’s shares tumbling to a 12-year low.
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Canada’s largest telecommunications company will pay C$5 billion ($3.6 billion) for Northwest Fiber LLC, which does business as Ziply Fiber and has 1.3 million locations in Washington, Oregon, Idaho and Montana, with plans to expand to more than 3 million in the next four years, according to a statement Monday.
The announcement comes less than two months after BCE unveiled a deal to sell its stake in Maple Leaf Sports & Entertainment Ltd. to Rogers Communications Inc. for C$4.7 billion. BCE said at the time that transaction would help reduce its debt, an issue credit agencies and analysts had flagged as a problem in recent months.
But BCE now says it will use those proceeds, an expected net amount of C$4.2 billion, to fund most of the Northwest Fiber deal. The company also ruled out increasing its dividend for all of 2025 — after 16 years of boosting its payout annually — and said it will raise fresh equity through a discount on its dividend reinvestment plan, also known as a DRIP.
The plan to halt dividend increases, a key part of the investment thesis for shareholders in Canada’s large telecom companies, sent BCE’s stock plunging the most in more than four years. The shares dropped 9.7% to close at C$40.47 in Toronto, the lowest closing price since May 2012.
Chief Executive Officer Mirko Bibic said the company didn’t decide to acquire Ziply “based on an assessment of one day’s stock market reaction,” and noted that sell-side analysts had been speculating for some time that the company would pause dividend growth and introduce a DRIP discount to shore up its capital position.
“We’re managing this for the long term,” he said in an interview, adding that “pursuing a fiber growth agenda is right on strategy and core to what BCE does really well.”
Talks with the management team at Northwest Fiber, which is owned by Searchlight Capital in partnership with three Canadian pension funds, only began in late September, after the MLSE transaction was announced, Bibic said.
(Bloomberg) — Nvidia Corp., the chipmaker at the heart of the artificial intelligence boom, is joining the oldest of Wall Street’s three main equity benchmarks.
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The company will replace rival Intel Corp. in the 128-year-old Dow Jones Industrial Average prior to the start of trading on Nov. 8, S&P Dow Jones Indices said in a statement late Friday. Sherwin-Williams Co. is also joining, replacing Dow Inc.
The addition of Nvidia to the blue-chip index is a testament to the power of the AI-driven rally that’s pushed the chipmaker up 900% in the past 24 months. The Dow Jones Industrial Average was the only major US equity benchmark that didn’t hold Nvidia — until now.
“Nvidia is a well-run company and joining the Dow demonstrates just how powerful its rally has been in recent years after it was at the right place at the right time when no one else was,” said Scott Colyer, chief executive at Advisors Asset Management.
The Santa Clara, California-based company has been the poster child of the euphoria surrounding AI and the biggest driver of stock market gains. The chipmaker ended the week with a market value of $3.32 trillion, about $50 billion shy of Apple Inc. Shares were up 3.2% in post-market trading, putting Nvidia in a position to dethrone Apple as the world’s most valuable company as soon as Monday if the gains hold.
Intel joined the gauge in November 1999 when it was added along with Microsoft Corp., SBC Communications and Home Depot Inc. Once the industry leader in computer processors, Intel has been recently struggling under a turnaround plan. The company has slashed spending in 2024, cut jobs and suspended investor payouts. Shares have lost 54% this year, and sank another 2% after the bell.
“Intel has lagged in a huge way,” said Adam Sarhan, founder of 50 Park Investments. “Now, the Dow is evolving. You don’t want to see stocks that were there 30 years ago. You want to see what’s the strongest that survive today.”
Midland, Michigan-based Dow Inc. has been in the blue-chip index since 2019, when it was spun off by former parent DowDuPont.
The Dow Jones Industrial Average, which first started as an index of 12 industrial stocks that included General Electric Co., has faced criticism for being a much narrower equities gauge than the S&P 500 Index or the Nasdaq 100 and lacking technology stocks that have dominated markets in recent years.
Bank of America Corp. said US regulators may take action against the firm over its efforts to detect suspected money laundering and sanctions violations, as well as its handling of payments on the Zelle network. Regulators may issue public orders after examining the firm’s compliance programs “including transaction monitoring, training, governance and customer due diligence,” […]
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(Bloomberg) — Boeing Co. launched a nearly $19 billion share sale, one of the largest ever by a public company, to address the troubled planemaker’s liquidity needs and stave off a potential credit rating downgrade to junk.
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The company offered to sell 90 million common shares and about $5 billion of depositary shares, according to a statement Monday, confirming an earlier Bloomberg News report.
The common-share portion alone would total just under $14 billion, based on Friday’s closing price of $155.01. That would be the largest US share sale since SoftBank Group Corp. sold part of its stake in T-Mobile US Inc. in 2020, data compiled by Bloomberg show.
Boeing’s shares were down 1.4% at 1:05 p.m. in New York. The stock had declined roughly 40% this year through Friday’s close, the second worst performance in the Dow Jones Industrial Average.
With overallotments, the fundraising total could rise to about $21.8 billion, based on Bloomberg calculations.
The infusion of funds would clear one of new Chief Executive Officer Kelly Ortberg’s most urgent tasks. He is grappling with a balance sheet strained by years of turmoil and the fallout from a strike, now in its seventh week, that is crippling manufacturing of the company’s main cash cow, the 737 Max jetliner. Boeing needs the capital infusion to maintain its investment-grade rating and fund its production ramp-up once the walkout ends.
The company is on pace to use around $4 billion in cash during the fourth quarter, which would bring its free-cash outflow to around $14 billion for the year. The planemaker expects to continue burning cash through the first half of next year as it restarts its airplane factories, including the assembly lines for its cash-cow 737 Max jetliner.
Boeing factory workers voted last week to reject the company’s latest contract offer, which included a wage increase of 35% spread over four years. The company plans to cut its workforce by about 10%, Ortberg said in a memo to employees Oct. 11.
The company on Oct. 23 received clearance from the US Securities and Exchange Commission to sell as much as $25 billion of equity and debt. Boeing also has a separate new credit agreement in place for $10 billion, giving it “additional short-term access to liquidity as we navigate through a challenging environment.”
Goldman Sachs Group Inc. and Apple Inc. will pay more than $89 million to resolve a long-running investigation into their credit-card joint venture after the top US consumer watchdog said the pair misled customers and mishandled disputes. The Consumer Financial Protection Bureau said customer service breakdowns and misrepresentations affected hundreds of thousands of Apple Card […]
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(Bloomberg) — A selloff in the world’s largest tech companies weighed heavily on stocks, while Treasury yields climbed amid bets the Federal Reserve will take a more measured approach on rate cuts.
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Equities extended losses into a third straight day, with the S&P 500 breaking below 5,800. Nvidia Corp. tumbled 4%, leading megacaps lower. Apple Inc. slid 3% after a closely followed analyst said iPhone 16 orders were cut by about 10 million units from the fourth quarter through the first half of 2025. As Tesla Inc. gets ready to report its results, Wall Street will be watching for signs that slowing sales are close to a trough.
FED: ECONOMIC ACTIVITY LITTLE CHANGED IN NEARLY ALL DISTRICTS
Investors face a number of risks that could be making them less willing to jump into the market: The next three weeks capture big tech earnings, October’s payrolls report, and the US election, followed by the Fed meeting. In another sign of Wall Street’s perception of future risk, the term premium on 10-year Treasury notes — an expression of the extra yield investors demand for owning the debt rather than rolling over shorter-term securities — hit the highest since November.
“This is about price exhaustion, this is about election exhaustion, it’s about campaign exhaustion, it’s about Fed exhaustion, it’s about policy exhaustion, it’s about geopolitical exhaustion,” said Kenny Polcari at SlateStone Wealth. “It’s about how stocks are stretched and it’s about the need for stocks to retreat, test lower, shake the branches, see who falls out and then move on.”
The S&P 500 fell 1.4%. The Nasdaq 100 dropped 2.1%. The Dow Jones Industrial Average slipped 1.3%. Boeing Co. dropped after signaling the company’s woes will take time to fix. Qualcomm Inc. got hit as Arm Holdings Plc canceled a license that allowed the company to use Arm’s intellectual property to design chips. Texas Instruments Inc. climbed after its results.
Treasury 10-year yields rose four basis points to 4.25%. A $13 billion sale of 20-year bonds tailed at the highest yield since May. The dollar rose against all of its Group-of-10 peers, on pace for its best month since 2022. The yen hit the lowest in almost three months, reviving concern that Japan may intervene. The loonie slid after the Bank of Canada stepped up the pace of easing.
(Bloomberg) — Stocks struggled for direction as traders weighed prospects of a slower pace of Federal Reserve rate cuts. Treasury 10-year yields hovered near 4.2%.
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Wall Street are paring back bets on aggressive policy easing as the US economy remains robust and Fed officials have sounded a cautious tone over the pace of future rate decreases. Rising oil prices and the prospect of bigger fiscal deficits after the upcoming presidential election are only compounding the market’s concerns. Since the end of last week, traders have trimmed the extent of expected Fed cuts through September 2025 by more than 10 basis points.
“Of course, higher yields do not have to be negative for stocks. Let’s face it, the stock market has been advancing as these bond yields have bee rising for a full month now,” said Matt Maley at Miller Tabak + Co. “However, given how expensive the market is today, these higher yields could cause some problems for the equity market before too long.”
Exposure to the S&P 500 has reached levels that were followed by a 10% slump in the past, according to Citigroup Inc. strategists. Long positions on futures linked to the benchmark index are at the highest since mid-2023 and are looking “particularly extended,” the team led by Chris Montagu wrote in a note.
“We’re not suggesting investors should start to reduce exposure, but the positioning risks do rise when markets get extended like this,” they said.
The S&P 500 was little changed. The Nasdaq 100 rose 0.1%. The Dow Jones Industrial Average added 0.1%. The Russell 2000 of smaller firms slipped 0.2%. Texas Instruments Inc., which gets almost three-quarters of its revenue from industrial and automotive chips, reports results after the market close.
Treasury 10-year yield was little changed at 4.20%. Oil advanced as traders tracked tensions between Israel and Iran. Gold climbed to a fresh record. Options traders are increasing bets that Bitcoin will reach a record high of $80,000 by the end of November no matter who wins the US presidential election.
The stock market has rallied this year thanks to a resilient economy, strong corporate profits and speculation about artificial-intelligence breakthroughs — sending the S&P 500 up over 20%. Yet risks keep surfacing: from a tight US election to war in the Middle East and uncertainty around the trajectory of Fed easing.
“While recent data indicate a more resilient US economy than previously thought, the broad disinflation trend is still intact, and downside risks — albeit lower — to the labor market remain,” said Solita Marcelli at UBS Global Wealth Management. “We continue to expect a further 50 basis points of rate cuts in 2024 and 100 basis points of cuts in 2025. This should bring Treasury yields lower.”
A string of stronger-than-estimated data points sent the US version of Citigroup’s Economic Surprise Index to the highest since April. The gauge measures the difference between actual releases and analyst expectations.
“On the back of September’s strong economic data, markets have already priced a slower pace of cuts,” said Lauren Goodwin at New York Life Investments. “If the Fed is able to move towards a 4% policy rate — still above the levels most believe represent the ‘neutral’ rate — then the equity market rally can continue. Disruptions to that view make equity market volatility more likely.”
Most Fed officials speaking earlier this week signaled they favor a slower tempo of rate reductions. Policymakers at their meeting last month began lowering rates for the first time since the onset of the pandemic. They cut their benchmark by a half percentage point, to a range of 4.75% to 5%, as concern mounted that the labor market was deteriorating and as inflation cooled close to the Fed’s 2% goal.
“We can point to a few reasons for the rise in global long rates but one possibility is that markets are giving a big thumbs down to central banks easing policy before we’ve seen a sustainable drop in inflation.” said Peter Boockvar author of The Boock Report. “I remain bearish on the long end and bullish on the short end.”
The last time US government bonds sold off this much as the Fed started cutting interest rates, Alan Greenspan was orchestrating a rare soft landing.
Two-year yields have climbed 34 basis points since the Fed reduced interest rates on Sept. 18 for the first time since 2020. Yields rose similarly in 1995, when the Fed — led by Greenspan — managed to cool the economy without causing a recession.
In prior rate cutting cycles going back to 1989, two-year yields on average fell 15 basis points one month after the Fed started slashing rates.
Meantime, the International Monetary Fund said the US election is creating “high uncertainty” for markets and policymakers, given the sharply divergent trade priorities of the candidates. That gap creates the risk of another potential round of volatility on global markets similar to the rattling August selloff.
“Presidents don’t control markets,” said Callie Cox at Ritholtz Wealth Management. “Over time, the stock market’s common thread has been the economy and earnings, not who’s in the Oval Office. Be prepared for mood swings in markets as we get closer to Election Day. But remember that election-fueled storms often dissipate quickly.”
As the earnings season rolls in, US companies are reaping the best stock-market reward in five years for beating profit expectations that were lowered in the run-up to the reporting season.
S&P 500 firms that posted better-than-estimated third-quarter earnings have outperformed the benchmark by a median of 1.74% on the day of reporting results, according to data compiled by Bloomberg Intelligence. That’s the strongest rate in BI’s records going back to 2019.
At the same time, companies missing estimates trailed the S&P 500 by a median of 1.5%, a less severe underperformance than the 1.7% experienced in the second quarter, the data showed.
“This earnings season we are watching what companies are saying about inflation and the economy,” said Megan Horneman at Verdence Capital Advisors. “In addition, their view on interest rates, especially if the Fed cannot be as aggressive as the market is pricing in at this point. It is good to see analysts getting realistic about 2025 earnings growth. However, at 15% earnings growth, we believe it is still too optimistic given the expectation for slower economic growth in 2025.”
Corporate Highlights:
Verizon Communications Inc. reported revenue that missed analysts’ expectations, weighed down by lackluster sales of hardware such as mobile phones.
3M Co. increased the low end of its 2024 profit forecast and reported earnings that topped analyst estimates as a push to boost productivity gained traction.
General Motors Co. signaled solid US demand for its highest-margin vehicles even as the broader market softens, posting better-than-expected results for the latest quarter and raising the low end of its full-year profit forecast.
General Electric Co.’s sales fell short of Wall Street’s expectations last quarter, tempering enthusiasm for its improved profit outlook as the jet engine maker grapples with supply-chain limitations that are weighing on deliveries.
Kimberly-Clark Corp., owner of the Scott toilet paper brand, lowered its full-year organic sales forecast after reporting weaker-than-expected results.
Philip Morris International Inc. forecast higher-than-expected profit this year, citing soaring demand for its Zyn nicotine pouches in the US.
Lockheed Martin Corp.’s third-quarter revenue missed expectations, pulled down by weaker aeronautical sales and ongoing issues with its F-35 fighter jet program.
Zions Bancorp’s third-quarter adjusted net interest income came in ahead of estimates. Morgan Stanley said the results beat across the board and sees the positive trajectory in net interest income continuing into 2025.
L’Oreal SA posted disappointing sales last quarter as the beauty company suffers from worsening consumer demand in China.
An investigation of Huawei Technologies Co.’s latest AI offering has unearthed an advanced processor made by Nvidia Corp. manufacturing partner Taiwan Semiconductor Manufacturing Co., suggesting that China is still struggling to reliably make its own advanced chips in sufficient quantities.
Key events this week:
Canada rate decision, Wednesday
Eurozone consumer confidence, Wednesday
US existing home sales, Wednesday
Boeing, Tesla, Deutsche Bank earnings, Wednesday
Fed’s Beige Book, Wednesday
US new home sales, jobless claims, S&P Global Manufacturing and Services PMI, Thursday
UPS, Barclays earnings, Thursday
Fed’s Beth Hammack speaks, Thursday
US durable goods, University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
The S&P 500 was little changed as of 1:47 p.m. New York time
The Nasdaq 100 rose 0.1%
The Dow Jones Industrial Average rose 0.1%
The MSCI World Index fell 0.2%
The Russell 2000 Index fell 0.2%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro fell 0.1% to $1.0803
The British pound was little changed at $1.2983
The Japanese yen fell 0.1% to 151.02 per dollar
Cryptocurrencies
Bitcoin fell 0.6% to $67,338.79
Ether fell 1.9% to $2,625.07
Bonds
The yield on 10-year Treasuries was little changed at 4.20%
Germany’s 10-year yield advanced four basis points to 2.32%
Britain’s 10-year yield advanced three basis points to 4.17%
Commodities
West Texas Intermediate crude rose 2.3% to $72.21 a barrel
Spot gold rose 1% to $2,748.02 an ounce
This story was produced with the assistance of Bloomberg Automation.
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US banks will now have to give customers access to their financial data after the top consumer watchdog finalized a long-awaited rule aimed at fueling more competition for financial products. Under the Consumer Financial Protection Bureau measure, consumers will be able to demand, download and transfer their highly-coveted data to another lender or financial services […]
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(Bloomberg) — Taiwan Semiconductor Manufacturing Co. raised its target for 2024 revenue growth after quarterly results beat estimates, allaying concerns about global chip demand and the sustainability of an AI hardware boom.
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The main chipmaker to Nvidia Corp. and Apple Inc. now expects sales to climb about 30% in US dollar terms this year, up from previous projections for about a mid-20% rise. That’s after TSMC reported better-than-predicted earnings for the September quarter. And it foresees capital expenditure rising in 2025 from roughly $30 billion this year.
TSMC’s outlook should help tamp down concerns that investors mis-judged the AI and semiconductor demand. Those fears crystallized after chip industry linchpin ASML Holding NV stunned markets by reporting about half the orders investors had expected. On Thursday, Chief Executive Officer C. C. Wei sought to dispel those doubts. Shares of the company trading on Tradegate gained 7.4% versus their last close on the German exchange.
Shares of Japanese chip gear makers including Lasertec Corp. pared losses in Tokyo, while Infineon Technologies AG rose in Europe alongside sector peers.
“The demand is real and I believe it’s just the beginning,” Wei said, echoing a number of executives including Nvidia Corp.’s CEO. In terms of overall chip demand, “everything’s stabilized and start to improve.”
TSMC’s shares have surged more than 70% this year, outpacing many of Asia’s biggest tech firms in a reflection of strong sales of the Nvidia chips vital to artificial intelligence development.
For a liveblog on TSMC’s earnings, click here.
Taiwan’s largest company had raised its outlook for 2024 revenue just a few months ago in July, underscoring expectations for spending on AI infrastructure from the likes of Microsoft Corp. and Amazon.com Inc. Steady adoption of artificial intelligence should also help fuel sales of iPhones and other gadgets in the long run.
Still, investors had watched for deviations in TSMC’s outlook after ASML blamed slower-than-expected recovery in the automotive, mobile and PC markets, impacting expansion plans for chip plants. AI remains a bright spot, its executives said.
On Thursday, TSMC reported a better-than-projected 54% rise in September-quarter net profit to NT$325.3 billion ($10.1 billion). And it expects revenue of $26.1 billion to $26.9 billion in the final quarter, beating an estimate for $24.9 billion.
While official trading of the company’s American depositary receipts won’t begin for a while, the ADRs were up about 4.5% on Robinhood’s overnight trading platform. TSMC is popular among US retail investors seeking to bet on the AI theme.
What Bloomberg Intelligence Says
TSMC’s guidance of a 57%+ gross margin, which surpasses consensus, coupled with a fast ramp-up of N3 nodes, indicating continuous robust high-performance computing chips, like AI training chip, production demand from Nvidia and others. This aligns with our expectations. Sales growth should be able to exceed 25% in 2025, supported by strong AI chip demand and TSMC’s leadership in 3- and 5-nm nodes, alongside advanced CoWoS packaging.
– Charles Shum, analyst
Click here for the research.
The world’s largest maker of advanced chips has been one of the biggest beneficiaries of a global race to develop artificial intelligence. Its shares have more than doubled since that boom took off in late 2022 with the debut of OpenAI’s ChatGPT. TSMC’s market capitalization briefly crossed the $1 trillion mark in the US.
Yet even before ASML, some investors have grown cautious about the trajectory of global AI spending. They question whether big tech firms like Meta Platforms Inc. and Alphabet Inc. will continue to splash out on AI chips and data centers without a truly killer AI application.
The risks of data center over-capacity and geopolitical issues have unnerved some investors. Bloomberg reported this week that Biden administration officials have discussed capping sales of advanced AI chips from Nvidia and other American companies on a country-specific basis.
On Thursday, Wei said he expects revenue from AI server processors to more than triple this year, yielding a mid-teens percentage of total sales in 2024.
Longer-term, TSMC is pursuing a rapid international expansion.
It’s planning more plants in Europe with a focus on the market for artificial intelligence chips, according to a senior Taiwanese official. That’s on top of construction underway in Japan, Arizona and Germany.
–With assistance from Vlad Savov, Cindy Wang, Mayumi Negishi and Lianting Tu.
(Updates with shares and executives’ comments from the fourth paragraph.)
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