Taiwan Semiconductor Manufacturing (TSM.US) reported a slowdown in revenue growth for October, potentially signaling cooling AI demand amid market bubble concerns. Data shows the company's October sales rose 16.9% year-over-year, marking the slowest growth since February 2024. Analysts expect 16% sales growth for the current quarter, though the stock has gained about 37% year-to-date.
Global tech stocks faced a sell-off last week as investors grew wary of overvaluation, with multiple Wall Street CEOs warning of an impending market correction. Scion Asset Management, led by Michael Burry (of "The Big Short" fame), recently disclosed a short position in Nvidia (NVDA.US). In an October post, Burry referenced classic films "WarGames" and "The Big Short," stating, "Sometimes we see bubbles. Sometimes we can act. Sometimes the only winning move is not to play." He later suggested that AI investments yield insufficient returns, likening the current hype to the fiber-optic overinvestment during the dot-com bubble, predicting many leading AI firms will collapse.
However, industry executives remain bullish on AI-driven growth. Meta (META.US), Google (GOOGL.US), Amazon (AMZN.US), and Microsoft (MSFT.US) plan to collectively invest over $400 billion in AI infrastructure next year—a 21% increase from 2025—to dominate the emerging tech space.
As a key supplier of AI chips, Nvidia CEO Jensen Huang stated last Saturday that his company’s business is "growing month by month, with increasing momentum." During a two-day visit, Huang met with Taiwan Semiconductor Manufacturing CEO C.C. Wei to request additional chip supply, as major design firms compete for the foundry’s limited capacity. The company also manufactures chips for Nvidia rivals like AMD (AMD.US) and Qualcomm (QCOM.US), as well as Apple (AAPL.US) for iPhones.
Qualcomm CEO Cristiano Amon echoed Huang’s optimism, stating in a recent interview that the world underestimates AI’s scale. Wei previously told analysts in October that Taiwan Semiconductor Manufacturing’s capacity remains tight, with efforts ongoing to bridge the supply-demand gap.