AI infrastructure spending is set to soar once again next year, and this stock is going to win big from that trend.Artificial intelligence (AI) stocks may have been under pressure lately due to concerns about a potential bubble, but there is no denying that this technology is gaining widespread adoption across various sectors.From robots in factories to automated ad campaigns to supply chain management to healthcare, AI is touching several industries in a positive way. That's why big tech giants, neocloud c ...

Core Insights - Taiwan Semiconductor Manufacturing Company (TSMC) reported a 39% year-over-year profit surge, driven by strong demand for AI chips, with net income reaching $4.8 billion [2][3] - The company's revenue for the third quarter was $33.1 billion, with high-performance computing, including AI and 5G applications, accounting for approximately 57% of total sales [3][4] - TSMC raised its 2025 revenue growth forecast to the mid-30% range, up from previous expectations of around 30%, contributing to a market value increase of over $260 billion in the last three months [5][6] Financial Performance - TSMC's profits increased by 14% from the previous quarter, marking a new record for the company [2][3] - Advanced chips (7 nanometers or smaller) constituted 34% of total wafer revenue, indicating a focus on higher processing power and efficiency [4] Strategic Initiatives - TSMC plans to increase its capacity expansion budget to $40 billion for the full year, up from a previous floor of $38 billion [6] - The company is investing heavily in U.S. facilities to mitigate potential tariff impacts, aligning with U.S. policy [6][7] Market Sentiment - Despite some volatility in stock prices, there is strong conviction in TSMC's future, particularly regarding AI chip production [8][10] - The overall market is experiencing fluctuations, but there is optimism about the continuation of the AI trade, contingent on overcoming significant economic challenges [14][15]

Core Insights - Alibaba has experienced a significant rally since mid-August, outperforming the consumer discretionary sector and the S&P 500 [1] - In the e-commerce space, Alibaba is leading compared to competitors like eBay and Amazon, with a notable advantage due to its focus on AI chip production [2] - The steep upward trend observed may not be sustainable in the long term, indicating potential support levels around 182, 180, 172, and 167 [3] Technical Analysis - The Relative Strength Index (RSI) indicates an overbought condition, suggesting strength in the current trend, but also presents mixed signals as it has broken through its upward trend line [4][5] - Volume profiles show key support areas around 163 and 180, while standard deviation channels suggest potential short-term boundaries between 185 and 208 [5][6] Options Strategy - A proposed options strategy involves a short put vertical that is neutral to bullish, targeting the October 17th expiration [9][10] - The strategy includes selling a 185 strike put while buying a 175 strike put, allowing for a credit of approximately $3, with a risk of about $700 [11][12] - This approach offers a 60% probability of finishing out of the money, making it a favorable trade for those expecting Alibaba to consolidate or rise above 182 [13][14]