Shares of Taiwan Semiconductor Manufacturing Company reached an all-time high on Thursday after Morgan Stanley lifted the price target on chip designer Nvidia, citing a continued surge in AI demand.

TSMC, which is the world’s largest producer of advanced processors, manufactures chips for companies such as Nvidia and Apple.

Morgan Stanley increased the price target on the U.S. chip giant to $750 from $603 on Feb. 7 and said it continues “to see a very strong near term picture.”

TSMC shares opened at a high of 709 New Taiwan dollars on Thursday morning and closed at NT$697, nearly 8% higher from its last close on Feb. 5. The Taiwan Stock Exchange resumed trading on Feb. 15 after the Chinese New Year break.

Nvidia is one of the biggest beneficiaries of the AI boom that started last year on increased interest in generative AI after the launch of OpenAI’s ChatGPT in November 2022. ChatGPT went viral for its ability to generate human-like responses on users’ prompts.

Large language models such as ChatGPT require lots of graphics processing units to train. The chips need to be powerful enough to crunch terabytes of data quickly to recognize patterns. ChatGPT is trained and run on thousands of Nvidia’s GPUs.

“B100 transition an important near term driver, impacting H100 lead times and competitive dynamics,” wrote Morgan Stanley analysts in the Feb. 7 report to clients.

Nvidia’s B100 GPU is expected to be an AI game changer which is even more powerful than its H100 AI processor, according to analysts.

TSMC currently manufactures 3-nanometer chips and plans to start 2-nanometer mass production in 2025.

The term “nanometer” in chips refers to the size of individual transistors. Smaller nanometer sizes typically yield more powerful and efficient chips as more transistors can be packed onto a single chip.

Shares in Taiwan’s Orient Semiconductor Electronics Ltd also rose 10% on Thursday.