Taiwan Semiconductor's record quarter renewed investors' faith in AI stocks, Jim Cramer says

Core Viewpoint - Taiwan Semiconductor's strong quarterly performance has renewed confidence in artificial intelligence stocks, particularly Nvidia, indicating robust demand and potential profitability in the AI sector [1][2]. Group 1: Company Performance - Taiwan Semiconductor reported a 35% profit increase, achieving eight consecutive quarters of year-over-year profit growth [1]. - The company has set a new record in earnings, surpassing market estimates, which reflects strong demand for its products used in advanced AI technology [1][2]. Group 2: Market Reaction - Following Taiwan Semiconductor's earnings report, chip stocks led the market higher, with major indexes closing in the green [2]. - Taiwan Semiconductor reached a new 52-week high, closing up 4.44%, while Nvidia saw an increase of 2.13% [2]. Group 3: Broader Market Trends - Gains were also observed in banks and consumer-oriented stocks, including restaurants and retailers, indicating a positive market sentiment [3]. - The housing sector, previously affected by downgrades, showed a rise, contributing to overall market optimism [3]. - Small cap stocks experienced significant movement, with the Russell 2000 index breaking out [3]. Group 4: Investor Sentiment - The turnaround in Nvidia, which had been underperforming, suggests that concerns about a market bubble may be easing, at least temporarily [4].