Taiwan Semiconductor Manufacturing Co. raised its 2024 revenue growth target after quarterly results beat estimates, easing concerns about global chip demand and the sustainability of a boom in AI hardware.

Nvidia Corp.’s main chipmaker and Apple Inc. now expects its sales to climb 30% this year, a sharp increase from previous projections of a maximum increase of 20%. This is after TSMC reported better-than-expected earnings for the September quarter. It projects capital spending of just over $30 billion in 2024, in line with previous expectations.

TSMC’s improved outlook should help allay concerns that investors may have misjudged demand for AI. Its shares have surged more than 70% this year, outpacing many of Asia’s biggest technology companies, reflecting strong sales of Nvidia Corp.’s chips, key to the development of artificial intelligence.

Taiwan’s largest company had raised its 2024 revenue forecast just months ago in July, highlighting expectations for AI infrastructure spending from companies like Microsoft Corp. and Amazon.com Inc. The steady adoption of artificial intelligence is also expected to help fuel iPhone sales. and other long-term gadgets.

Investors had been watching for gaps in the outlook after major supplier ASML Holding NV announced only half of the orders analysts estimated. The chipmaking equipment maker blamed a slower-than-expected recovery in the automotive, mobile and PC markets, impacting chip factory expansion plans. But AI remains a bright spot, its executives said.

On Thursday, TSMC reported a better-than-expected 54% rise in profits for the September quarter.

While official trading in the company’s American depositary receipts won’t begin for a few hours, ADRs are up about 4.5% on Robinhood’s overnight trading platform. TSMC is popular among US retail investors looking to bet on the AI ​​theme. Shares of Japanese chip gear makers, including Lasertec Corp., also pared losses in Tokyo after TSMC’s announcement.

The world’s largest maker of advanced chips has been one of the biggest beneficiaries of the global race to develop artificial intelligence. Its shares have more than doubled since this boom began in late 2022 with the launch of OpenAI’s ChatGPT. TSMC’s market capitalization briefly crossed the $1 trillion mark in the United States.

Yet even before ASML, some investors had become cautious about the sustainability of global AI spending. They question whether big tech companies like Meta Platforms Inc. and Alphabet Inc. will continue to invest in AI chips and data centers without a truly killer AI application.

Risks of data center overcapacity and geopolitical issues have unnerved some investors. Bloomberg reported this week that Biden administration officials discussed capping sales of advanced AI chips from Nvidia and other U.S. companies on a country-specific basis.

For now, TSMC appears to be pursuing rapid international expansion.

According to a senior Taiwanese official, the company is planning more factories in Europe, focusing on the artificial intelligence chip market. This is in addition to construction underway in Japan, Arizona and Germany.