The stock market just got its first signal from earnings that the AI trade is still booming

Earnings season has kicked off, and investors are parsing results to see if their favorite trade can keep going strong into year-end.

Luckily, Wall Street got a firm signal that the AI trade is still alive and well on Thursday, with one of the biggest names in semiconductors reporting stellar results for the third quarter. Stocks jumped in morning trading, with chip stocks broadly in focus for investors.

Here’s where major indexes stood shortly after the 9:30 a.m. ET opening bell on Thursday:

Taiwan Semiconductor Manufacturing Company raised its full-year guidance and revealed a bullish outlook for AI spending as it reported $33.10 billion in Q3 revenue, a 40.8% year-over-year increase and a 10% jump from the previous quarter. Compared to Q2, Q3 results showed a 6.0% revenue bump and a 13.6% increase in net income.

Executives at the company weren’t shy about where they see the latest strength coming from, pointing specifically to massive demand from AI. CEO C.C. Wei said on the earnings call that the company is convinced that “the AI megatrend is strengthening.”

Other chip stocks jumped on the news of the strong results, with Nvidia and Broadcom both up 1%.

TSMC’s results also importantly helped investors shrug off their other big fear this week, which is that the trade war will once again become an overhang for the market.

This week saw a new flare-up of tariff worries as the White House insisted it would take a tough stance on China in light of its latest moves to restrict flows of rare earth materials.

Treasury Secretary Scott Bessent said on Wednesday that investors should not count on the administration to change its position on trade to boost a flailing stock market. The so-called TACO trade was already on display this week after Donald Trump calmed nerves with a post on Sunday, after last Friday’s tough talk on China tariffs sent stocks plummeting.

Meanwhile, TSMC wasn’t the only tech update that boosted investors’ spirits.

Foxconn, known for producing key components for Apple, recently revealed that its chairman met with representatives from OpenAI and has plans to meet with Nvidia in the near future.

The ChatGPT maker has been on a deal-making spree lately, inking contracts with companies such as Nvidia, Advanced Micro Devices and Oracle.

With one top AI supplier raising guidance and another exploring a deal with OpenAI, investors are rekindling bets that the AI craze will keep pushing the market higher.

Despite the volatility stemming from trade war jitters, stocks are on track for a solid week of gains, with the S&P 500 up nearly 1% since last Friday’s close.