A-shares closed higher, with AI hardware receiving positive news in late trading.

Despite a sharp overnight rally on Wall Street and a broad rebound across Asian stock markets today, A-shares delivered a rather muted performance, neither exciting nor disappointing. On November 10, the market opened higher but pulled back during the session, with all three major indices finishing in positive territory. By the close, the Shanghai Composite Index rose 0.08%, the Shenzhen Component Index gained 0.86%, and the ChiNext Index climbed 1.46%. A total of 4,273 stocks advanced, with 95 hitting the daily limit-up, while 1,149 declined.

AI comic-drama concept stocks strengthened once again, with Wentou Holdings, Ciwen Media, Zhangyue Technology, and Gravity Media among the multiple stocks hitting the limit-up. AI glasses concept stocks surged in the afternoon, with SeeYA Technology, Guoguang Electric, Emdoor Information, and Yingtong Communication reaching the limit-up. Robotics concept stocks were actively traded, with Guangyang Co, Tianqi Co, and Xiangyang Bearing hitting the limit-up. On the downside, oil and gas stocks fell collectively, with PetroChina dropping more than 6%. Shipping, coal, and insurance sectors were among the biggest decliners.

However, right at the market close, another piece of good news emerged for AI hardware: Taiwan Semiconductor Manufacturing reported a 60% revenue increase, signaling strong demand for AI chips. Taiwan Semiconductor Manufacturing announced that its October revenue grew 59.7% year-on-year and 14.7% month-on-month, reaching approximately $17.9 billion. This growth rate exceeded the roughly 51% year-on-year increase seen in the third quarter. Analysts on average expect Taiwan Semiconductor Manufacturing's revenue growth to reach 63% in the final three months of this year.

Still, investors continue to weigh the long-term outlook for AI demand. The reason is that building data centers not only requires massive capital but also consumes enormous amounts of energy and other resources, while rising financing costs introduce uncertainty to future investment returns. Currently, Taiwan Semiconductor Manufacturing is advancing large-scale capacity expansion globally, planning to build and support approximately 20 factories. This is an unprecedented pace of expansion for the company. Typically, the company simultaneously pursues only four to five new construction projects.

The company reiterated that its capital expenditure this year is expected to reach up to $64 billion, a record high. Analysts believe that driven by revenue growth and margin improvement, Taiwan Semiconductor Manufacturing's earnings per share (EPS) from 2027 to 2028 could exceed consensus estimates by 6% to 7%. Even if Taiwan Semiconductor Manufacturing invests $250 billion to advance large-scale capacity construction, its advanced-process capacity will remain largely in short supply with fully booked orders through 2028, which will support the company in further raising chip prices. However, by 2029, as depreciation expenses rise, AI growth slows, and supply capacity gradually catches up with demand, Taiwan Semiconductor Manufacturing's growth potential may narrow somewhat.