S&P 500, Nasdaq open higher after TSMC profits beat forecasts

Investing.com -- US stocks opened higher on Thursday after Taiwan Semiconductor Manufacturing Co. -- the world’s biggest contract chipmaker -- posted a stronger-than-expected third-quarter profit on Thursday that was driven by sustained demand from the artificial intelligence industry.

By 09:44 ET (13:44 GMT), the benchmark S&P 500 had gained 18 points or 0.3%, the tech-heavy Nasdaq Composite had risen by 81 points or 0.5%, and the 30-stock Dow Jones Industrial Average had gained 164 points or 0.4%.

TSMC income surges past estimates

TSMC clocked a net profit of T$325.26 billion ($10.1 billion) in the three months to September 30, it said in a press release. The figure was higher than a Reuters estimate of T$300.2 billion.

The chipmaker also provided an upbeat outlook for the current quarter, partly citing improved capacity utilization. US-listed shares in the Taiwanese firm jumped by more than 10%.

Third-quarter revenue climbed to T$759.69 billion, up 39% from last year. CFO Wendell Huang said fourth quarter revenue will be between $26.1 billion and $26.9 billion, with a gross margin of 57% and 59%, while annual revenue is also expected to grow around 30%.

Sales were bolstered chiefly by TSMC's advanced 3-nanometer chips, which accounted for 20% of overall revenue from wafers, the company said.

"We continue to observe extremely robust AI-related demand from our customers," CEO C.C. Wei noted in a post-earnings webcast.

Thursday's earnings come just days after semiconductor equipment maker ASML (NASDAQ:ASML ) unveiled a tepid sales outlook for 2025 due in part to slow chip demand from sectors outside of AI.

Earnings parade, retail sales in focus

Streaming giant Netflix (NASDAQ:NFLX ) will report its earnings on Thursday, along with fund manager Blackstone (NYSE:BX ) and biotechnology firm Intuitive Surgical (NASDAQ:ISRG ).

These precede results from tech titans Alphabet (NASDAQ:GOOGL ) and Tesla (NASDAQ:TSLA ) in the first half of next week, along with several other major US companies.

Focus this Thursday is also on retail sales for more cues on the American economy, with conviction growing that the Federal Reserve will cut interest rates at a slower pace in the coming months.

On a monthly basis, retail sales in the world's largest economy rose by 0.4%, accelerating from an unrevised uptick of 0.1% in August, according to data from the Commerce Department. Economists had seen the reading at 0.3%.

Robust spending on items like groceries and clothing helped offset weakness in expenditures on higher-priced goods such as furniture and electronics.

(Ambar Warrick contributed reporting.)

Source: Investing.com