Chip stocks try to rebound as TSMC earnings lift hopes after steep sell-off

• Nvidia and TSMC rose nearly 3%, while AMD and Intel rose about 1% on Thursday morning.
• TSMC reported a 36% rise in quarterly profit, and raised its full-year guidance for revenue growth.

Chip stocks were up on Thursday after the sector sold off sharply in the previous session on fears of a widening crackdown on trade with China.

Chip stocks tumbled across the board Wednesday. Nvidia shares fell 6.62%, while TSM and AMD's shares fell almost 8% and over 10%, respectively.

Investors on Thursday, however, were looking to stage a rebound, with shares of Nvidia and TSM up about 2%, while AMD and Intel rose about 1%.

The rebound comes after TSMC reported strong second-quarter earnings, with a 36% year-over-year rise in quarterly profit. The jump in profit is a result of its strong chip sales, as its high performance computing segment saw a 28% rise in sales for last quarter.

TSMC seems to be betting on the AI industry continuing to grow, upping its full-year revenue growth projections from low- to mid-20% up to mid-20%. The company projects between $22.4 billion to$23.2 billion in third-quarter revenue.

TSMC shares fell sharply Wednesday after Donald Trump said in an interview published by Bloomberg that Taiwan "did take about 100% of our chip business," and the country should pay the US for its defense. TSMC stock traded in Taiwan was down over 2% Thursday.

Semiconductor names suffered broadly on Wednesday after reports that President Joe Biden's administration is considering stricter controls on trade with China.