Gene Munster Predicts 'Bull Market Driven By AI' Amid TSMC's Stellar Performance

On Friday, Gene Munster shared his insights on the ongoing AI market dynamics after key Nvidia supplier Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM) reported impressive third-quarter performance.

What Happened: Munster took to X and emphasized the importance of focusing on the broader AI landscape rather than short-term fluctuations. He pointed out that just two days prior, concerns arose among investors regarding a potential slowdown in the AI sector. This was sparked by ASML Holding N.V. (NASDAQ:ASML) reducing its 2025 revenue forecast by approximately 18%. The prevailing theory suggested that a decline in demand for AI chip-making machines could indicate a slowdown in AI chip demand.

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However that was not the case. Munster highlighted that TSMC saw a 10% surge in its stock price after announcing a 6% increase in December revenue projections. TSMC also reported that its demand for CoWoS, a key AI technology, is outpacing its supply capabilities, despite efforts to double capacity annually.

Munster stated, “I still believe we’re in front of a 2-4 year bull market driven by AI.”

Today's another case study on why it's important to stay focused on the big AI picture versus the day-to-day noise.

Two days ago, investors were concerned that the AI trade was starting to slow, based on $ASML guiding 2025 revenue down by about 18%. The theory was that if the…

— Gene Munster (@munster_gene) October 17, 2024

Why It Matters: Munster’s comments come in the wake of TSMC’s impressive third-quarter results, which exceeded expectations due to robust demand for AI chips. TSMC’s revenue for the quarter reached NT$759.69 billion ($23.50 billion), marking a 39% year-over-year increase. This growth underscores the strong demand for advanced processor node technologies used in AI applications.

Additionally, Munster had previously addressed the market’s reaction to ASML’s guidance cut, describing it as an overreaction. As reported by Benzinga, he noted that only a small portion of ASML’s revenue is directly tied to AI demand. Munster’s perspective suggests that the AI trade remains on track, with TSMC’s performance further supporting this outlook.

Price Action: As per Benzinga Pro, t the time of writing during the pre-market hours on Friday, Invesco QQQ Trust, Series 1 (NASDAQ:QQQ) was up by 0.70% while major semiconductor ETFs were also trading slightly upwards. iShares Semiconductor ETF (NASDAQ:SOXX) was up by 1% while Direxion Daily Semiconductor Bull 3X Shares (NYSE:SOXL) was trading 3.20% higher. SP Funds S&P World ETF (NYSE:SPWO) which allows investments into TSM, was up by 1.54%.

Read Next:

• Apple Spark Hope For America’s Semiconductor Comeback: Key Supplier TSMC Reportedly Begins Producing Chip

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.

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