(Bloomberg) — Shares of Taiwan Semiconductor Manufacturing Co. hit an all-time high as the world’s largest contract chipmaker looks set to cap its best annual performance in 25 years.

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Shares rose as much as 1.4% in Taipei on Tuesday, briefly surpassing their Nov. 8 high, before erasing the gain to finish flat. The move came after US chip stocks, including key customer Nvidia Corp., rallied overnight. Shares of TSMC are up 82% this year amid continued investor enthusiasm for AI operations.

“For us, TSMC remains the best way to play the AI ​​theme without having to pick a winner or a technology, at a reasonable valuation,” said Kevin Net, head of Asian equities at Financiere de L Echiquier. The next catalyst to watch will be Nvidia’s presentation at CES 2025 next month, as well as TSMC’s upcoming results and guidance, he added.

With a client list that also includes Apple Inc. and Advanced Micro Devices Inc., TSMC has been a major beneficiary of the boom in AI spending. The company is expected to report sales growth of 36% for the December quarter, with a gross profit margin of 58.3%, the highest since 2022.

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