Taiwan Semi (NYSE:TSM) is one of today’s top-trending stocks, and its shares are jumping 8% in early trading. The chipmaker’s profits fell last quarter compared with the same period in 2022, but it noted that it expects its sales to jump “at least” 20% this year, driven by the proliferation of artificial intelligence (AI).

Taiwan Semi’s Q4 Results and Outlook

Taiwan Semi’s revenue changed little last quarter versus the same period a year earlier, while its profit tumbled 19% year-over-year (YOY).

However, the firm’s earnings per share came in at $1.44, well above analysts’ average estimate of $1.39.

Moreover, the firm predicts that its sales will jump 20%-25% in 2024. In the short term, Taiwan Semi expects its growth to be lifted by powerful demand for its chips that power high-performance computing (HPC) applications. Those systems are used to create generative AI.

TSM believes that “robust AI-related demand” will improve its 2024 financial results. However, it expects the sales of its smartphone chips to be relatively low during the current quarter.

TSM’s “growth forecast for 2024 is… slightly better than the Street’s expectation of low-20s percent, and somewhat below our estimate of high-20s percent,” investment bank Needham reported.

What Investors Are Betting on and the Price Action of TSM Stock

Those buying TSM stock are betting that strong demand for the company’s AI chips will enable it to at least meet its ambitious 2024 revenue guidance.

Heading into today, the shares have jumped 15% in the last three months, while they rose 3% in the preceding month. TSM stock is up about 24% YOY.

.On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.