Shares of Taiwan Semiconductor Manufacturing (TSMC) surged today as the company announced robust sales figures for April, signaling a strong start to the second quarter. The stock jumped 4.9% by midday, reflecting investors' optimistic response to the news.

TSMC reported a staggering 59.6% year-over-year increase in April revenue, amounting to $7.3 billion. Sequentially, revenue also rose by 20.9% from March to April. Moreover, the company's revenue for the first four months of the year witnessed a substantial growth of 26.2%.

While TSMC does not provide commentary when releasing monthly metrics, these promising numbers indicate a continuous rebound in the demand for chips, following a slowdown experienced in 2022 and 2023, including strong demand for advanced chips used in artificial intelligence (AI). Consequently, this positive development had a ripple effect across the AI chip sector, with Nvidia experiencing a brief surge in stock prices, and Arm Holdings posting a gain of up to 6%.

Although TSMC has not had the same explosive growth as AI-focused companies like Nvidia, Super Micro Computer, and Arm, the company plays a pivotal role in the AI industry. As a contract chip manufacturer, TSMC produces approximately 90% of advanced chips for fabless chip designers, including prominent players like Nvidia, Arm, Broadcom, and AMD; all of whom see AI as a significant driver for growth.

April's impressive revenue growth served as a notable acceleration from the 16.5% growth recorded in the first quarter, setting a positive trajectory for TSMC's performance in the coming months. Although month-to-month results in chip manufacturing can be volatile, maintaining this momentum could potentially lead to further stock gains for TSMC.

Investors may consider the recent performance of TSMC stock, but it is worth noting that The Motley Fool Stock Advisor analyst team did not include Taiwan Semiconductor Manufacturing among their top 10 stocks for investors to buy now. The team identified 10 stocks with the potential to generate substantial returns in the future. For instance, had one invested $1,000 in Nvidia in 2005 based on their recommendation, it would have grown to a staggering $543,758 by today's value.

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As TSMC continues its strong performance, investors will keenly monitor the company's progress in the chip industry and its ability to sustain this unprecedented momentum.