Technology stocks have been in a downturn over the past six months, and the tech-focused Nasdaq Composite index is down 8% from its record high on Oct. 29, 2025.
In fact, the Nasdaq Composite briefly entered correction territory on March 26 before jumping out of it. The weakness in Nasdaq stocks, however, isn't justified, as the top names in this sector continue to deliver outstanding growth, primarily fueled by artificial intelligence (AI). The downturn is the result of external factors, such as the war in the Middle East.
However, there is a strong chance that Nasdaq stocks will regain their mojo in mid-April, that's next week. That's because two of the biggest names in tech -- ASML Holding (ASML +4.92%) and Taiwan Semiconductor Manufacturing (TSM +5.29%) -- are going to release their quarterly results on April 15 and 16, respectively.
Let's look at the reasons why these two semiconductor stocks could bring the tech sector out of the rut it is in.
Image source: ASML.
ASML and TSMC are the ultimate pick-and-shovel AI plays
The AI boom in recent years has been powered by semiconductors. That's not surprising, as chips are the basic building blocks for training AI models and running inference applications in the cloud. Semiconductors will continue to play a central role in the AI boom, doing the heavy lifting in data centers and edge devices such as smartphones, personal computers (PCs), and robots.
This explains why McKinsey expects the global semiconductor market's revenue to increase to $1.5 trillion to $1.8 trillion by 2030, up from $775 billion last year. ASML and TSMC will be the biggest beneficiaries of this trend.
NASDAQ: ASML
Key Data Points
ASML's status as the only manufacturer of extreme ultraviolet (EUV) lithography machines capable of printing advanced chips needed to run AI workloads makes it one of the most important companies in the semiconductor ecosystem. TSMC, on the other hand, runs fabrication plants where it churns out chips designed by fabless chip designers, such as Nvidia and Broadcom, which don't have manufacturing facilities of their own.
TSMC, in fact, is the world's largest foundry with a 72% market share, according to Counterpoint Research. The next largest player in this market has a share of just 7%. So, it would be safe to assume that the semiconductor supply chain will be derailed if we take either ASML or TSMC out of the equation, making them the ultimate pick-and-shovel AI stocks.
This is precisely why a solid set of results from these companies next week could give AI stocks, which have been the driving force behind the broader stock market's rally in recent years, a nice boost. Importantly, TSMC and ASML could exceed the market's expectations, and may even help the Nasdaq Composite regain its mojo. I predict that will happen. Let's see why that may be the case.
Aggressive AI infrastructure spending will be a tailwind for both companies
Spending on AI infrastructure shows no signs of slowing down, as businesses and governments continue to invest heavily to capitalize on the productivity gains this technology promises. According to Statista, AI infrastructure spending could increase from $334 billion last year to $902 billion in 2029.
McKinsey estimates that 60% of the investment in AI infrastructure is allocated to chips and other computing hardware that go into data centers. This could spur more demand for the chips that TSMC fabricates for its customers. It is worth noting that TSMC has already gotten off to a solid start in 2026. Its revenue increased 37% year over year in January, followed by a 22% jump in February.
The foundry giant is all set to sustain this terrific momentum for the rest of the year, as its biggest customer, Nvidia, recently said it expects to sell $1 trillion worth of its Blackwell and Vera Rubin AI chip systems in 2026 and 2027. That's double the company's earlier projection of $500 billion in Blackwell and Rubin chip sales for 2025 and 2026. Broadcom, another TSMC customer, is forecasting a fivefold increase in AI chip revenue in just two fiscal years.
TSMC was already estimating a 30% revenue jump in 2026. It won't be surprising to see it do better than that, given the massive growth chip designers such as Nvidia and Broadcom are anticipating. And as TSMC relies on ASML's EUV machines to print advanced chips, ASML is likely to continue experiencing strong order inflows for its offerings.
Even memory manufacturers, such as Micron Technology and SK Hynix, are poised to spend big on EUV machines from ASML. SK Hynix recently noted that it will purchase $8 billion worth of EUV machines from ASML as it looks to fill the supply gap in the memory market. Analysts are estimating a 15% increase in ASML's revenue in 2026, along with a 20% increase in earnings. However, its guidance could be better than that when it releases its quarterly results next week.
In the end, it won't be surprising to see solid results and guidance from ASML and TSMC give investors a much-needed confidence boost and potentially bring an end to the recent downturn in the Nasdaq Composite.
