TMTPOST -- Nvidia shares jumped 3.4% to $149.43, refreshing their record close set in November, and U.S.-listed shares of Nvidia’s key partner Taiwan Semiconductor Manufacturing Co. (TSMC) closed nearly 5.5% higher to their record on Monday, led by Micron Technology, which gained 10.5% that day.  Global chip stocks surged after Foxconn, the world's largest electronics manufacturer, posted another quarterly revenue record, driven by strong demand from artificial intelligence (AI) boom.

Credit：Microsoft

Foxconn broke its quarterly revenue record for the last quarter of 2024. According to a statement released on Sunday, revenue that quarter rose year-over-year (YoY) 15% to NT$2.13 trillion for three-month period ended December, beating analysts estimated NT$2.1 trillion. Revenue for December also topped expectation, soaring YoY 42% to NT$654.83 billion. That brought the full year revenue to a record NT$6.86 trillion with a rise of 11% from a year ago.  

Foxconn said the stellar revenue growth for its cloud and networking products division in the fourth quarter resulted from robust AI server demand, while revenue from smart consumer electronics was roughly stalled compared with a year earlier. Looking forward the first quarter of 2025, the Taiwan-based company said the overall operations are gradually entering the traditional off-season. It expected “significant growth” in the first quarter, though the sequential performance will reach similar levels that are equal to the average of the past five years. Revenue from its cloud business including AI servers for the full year is projected to match sales from its iPhone assembly division.  

Chip stocks also gained traction from AI chip giant Nvidia’s large client Microsoft Corporation. In a blog posted last Friday, Microsoft Vice Chairman and President Brad Smith said the company is on track to invest around $80 billion to build out AI-enabled data centers to train AI models in the fiscal year 2025 ended June, 2025. Microsoft will also deploy AI and cloud-based applications around the world in the fiscal year and more than half of the total annual investment will be in the United States, reflecting its commitment to this country and our confidence in the American economy, Smith wrote.  

Microsoft recorded revenue of $65.6 billion for the first fiscal quarter ended September 30 with a year-over-year (YoY) increase of 16%, topping Wall Street projection of $64.51 billion. Microsoft Cloud delivered stronger-than-expected growth for the September quarter, highlighting the AI drive. Cloud is the business of tech giants that is currently most evidently benefiting from generative AI applications as their investments in developing AI helped drive demand for cloud services.

Revenue from Microsoft Cloud surged 22% YoY to $38.9 billion, compared with analysts’ forecast of $38.11 billion. Intelligent Cloud generated $24.09 billion with a 20% YoY increase, beating estimated $26.74 billion.

Microsoft said AI contributed 12 percentage points to Azure revenue growth for the September quarter, more than the contribution of 11 percentage points three months ago. 

Microsoft continued aggressive spending on AI for the September quarter. Capital expenditure,  or Capex, including assets acquired under finance leases soared 78.6% to $20 billion, after a 77.6% YoY increase in Capex for the second quarter. Microsoft said the Capex aims to support demand in its cloud and AI offerings. Of its cloud and AI expenditures, roughly half was for long-lived assets. Cash paid for property and equipment was $14.9 billion with a 50.7% surge, while analysts expected to be $14.55 billion, up 47% YoY.