Tae Kim

Technology-stock investors are worrying that artificial-intelligence demand could be upended by the uncertainty surrounding President Donald Trump's tariff proposals, and the U.S.'s trade war with China. The iShares Future AI & Tech exchange-traded fund has declined 19% this year.

But in recent days, there were three important signs that AI demand is still strong.

On Thursday, Taiwan Semiconductor Manufacturing reported blistering sales growth of 46.5% for March versus the prior year. Strong revenue growth suggests demand remains robust. The foundry makes nearly all the chips for advanced AI semiconductors for Nvidia, Advanced Micro Devices, and large U.S. technology companies.

TSMC makes custom AI semiconductors for Alphabet and Amazon.com, who both have reaffirmed their conviction in AI.

On Wednesday, Alphabet CEO Sundar Pichai reiterated the company's $75 billion capital-expenditure guidance for 2025, which they originally gave in February. The guidance is up 43% from the prior year, and when the outlook was first given, it was significantly above Wall Street expectations.

While Amazon didn't explicitly reiterate capex guidance, the retail and cloud-computing firm's CEO Andy Jassy provided strong remarks that the company plans to continue investing in AI.

"We continue to believe AI is a once-in-a-lifetime reinvention of everything we know, the demand is unlike anything we've seen before, and our customers, shareholders, and business will be well-served by our investing aggressively now," Jassy wrote in a letter to shareholders Thursday.

The evidence this week, at least thus far, shows that demand for AI remains intact.

Write to Tae Kim at tae.kim@barrons.com

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April 10, 2025 12:53 ET (16:53 GMT)

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