Taiwan Semiconductor Manufacturing Company Ltd. (TSM) is scheduled to report second-quarter 2024 results on Jul 18.Robust demand for advanced technologies, solid momentum among customers, increasing design wins, and a strong presence in the domestic and international markets are expected to have favored the company in the quarter-to-be reported.For the second quarter, Taiwan Semiconductor expects revenues between $19.6 billion and $20.4 billion. The Zacks Consensus Estimate for the same is pegged at $20.2 b ...

Semiconductors have been the success story of Wall Street over the past two years. Much of the gain that the technology sector has made since the onset of 2023 has been based on the AI optimism-led semiconductor boom. The rising demand for electronics also ensures their status as profitable holdings for investors.Per the Semiconductor Industry Association, global sales for semiconductors are expected to reach $611.2 billion in 2024, rising 16% year over year. In 2025, it is likely to rise 12.5%. The chip-ma ...

Core Viewpoint - Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) is currently perceived as overvalued despite its strong operational developments and future growth prospects in AI-related revenue [1][10]. Operational Developments - TSM is expanding its operations internationally, with plans to build three fabrication facilities in Arizona over the next five years and two plants in Japan within three years [2]. - The company is also collaborating with a European Semiconductor Manufacturing Company in Germany, targeting production by the end of 2027 [2]. - TSM is developing a new chip-manufacturing technology called A16, expected to enter production in the second half of 2026 [2]. - Price increases for advanced process manufacturing have been implemented, ranging from 3% to 6%, with major clients like Nvidia, Apple, and Qualcomm accepting these increases [2]. - TSM anticipates its AI-related revenue to double in 2024 and grow at a 50% compound annual rate over the next five years, potentially reaching over 20% of total revenue by 2028 [2]. Financial and Valuation Analysis - Despite a recent contraction in revenue and net income, TSM's revenue grew by 16.5% year-over-year in the first quarter, with net income increasing by 8.9% [3]. - TSM holds over 60% of the global semiconductor foundry market, significantly ahead of Samsung's 14%, providing a strong competitive advantage [4]. - Analysts forecast a revenue CAGR of around 16% and an earnings per share CAGR of approximately 24% over the next five years, indicating potential margin expansion [5]. - The current price-sales ratio is around 11, while a more reasonable ratio would be around 7, suggesting the stock is overvalued at present levels [7]. Conclusion - TSM is strategically positioning itself for long-term success, but current valuations may lead to short-term to medium-term downside risks for new investors [10].

Was anyone really shocked by Taiwan Semiconductor Manufacturing’s (NYSE:TSM) strong second-quarter report? It should have been a given that Taiwan Semiconductor stock would blow past expectations. After all it’s the largest pure-play foundry used by all the top AI chipmakers.June sales soared 33% year-over-year to $6.4 billion, easily trouncing Wall Street’s expectations of $5.7 billion. Second-quarter sales surged 40% to $20.7 billion. Taiwan Semiconductor makes advanced chips for companies like Nvidia (NA ...

View of the Tainan Science Park in Taiwan, Asia. BING-JHEN HONG Last week, Taiwan Semiconductor Manufacturing (NYSE:TSM) (OTC:TSMWF), also known as TSMC, released its June revenue report. The company reported NT$207 billion in revenue for the month. This Taiwan Dollar sum works out to $6.5 billion in U.S. dollars, assuming that the average exchange rate during the quarter was the same as today’s exchange rate. TSMC has not reported an official U.S. dollar figure for the month yet. The fact that we now hav ...

Taiwan Semiconductor Manufacturing stands to benefit from booming demand in AI chips.One of the biggest catalysts in the artificial intelligence (AI) movement is semiconductors. Highly specialized chips called graphics processing units (GPUs) are used for a variety of AI-powered applications including training large language models and autonomous driving.Nvidia has emerged as the de facto leader in generative AI chips thanks to its A100, H100, and new Blackwell series GPUs. Since the beginning of the year, ...

Group 1: Investment Opportunity - Taiwan Semiconductor Manufacturing (TSMC) is positioned as a strong investment alternative to Nvidia, benefiting from the same AI-driven market trends while being more diversified [1] - TSMC is the world's largest contract chip manufacturer, continuously innovating and adapting its technology to maintain a competitive edge [2] Group 2: Technological Advancements - TSMC's recent introduction of 3nm chips has already contributed 9% to its revenue in Q3 2024, despite only starting production in Q3 2023 [2] - The company is already developing 2nm chips, expected to launch in 2025, with demand for these chips reportedly exceeding that of previous generations [3] Group 3: Revenue Growth Projections - TSMC anticipates a 50% compounded annual growth rate in AI-related chip revenue over the next five years, which could account for over 20% of its total revenue [3] - Apple has been a significant customer for TSMC, contributing 25% of total revenue in 2023, and the launch of new features is expected to drive an upgrade cycle benefiting TSMC [4] Group 4: Valuation and Earnings - TSMC's stock valuation has increased, trading at 15 times forward earnings entering 2024, but remains more attractive compared to Nvidia's 47 times forward earnings [5][6] - Analysts project a 22% increase in earnings per share (EPS) for 2024 and 26% for 2025, indicating that TSMC's growth will support its valuation [6]

Company Performance - TSMC's stock closed at $187.34, reflecting a +1.54% increase from the previous day, outperforming the S&P 500's gain of 0.55% [1] - The stock has appreciated by 6.7% over the past month, surpassing the Computer and Technology sector's gain of 5.73% and the S&P 500's gain of 4.28% [1] - The upcoming earnings report on July 18, 2024, is expected to show an EPS of $1.37, indicating a 20.18% growth year-over-year, with projected quarterly revenue of $20.2 billion, up 28.86% from the previous year [1] Annual Forecast - Zacks Consensus Estimates predict TSMC will report earnings of $6.16 per share and revenue of $85.12 billion for the year, reflecting increases of +18.92% and +22.83% respectively compared to the prior year [2] - Recent revisions to analyst forecasts for TSMC are important as they indicate short-term business trends and can influence stock price performance [2] Valuation Metrics - TSMC currently has a Forward P/E ratio of 29.93, which aligns with the industry average [3] - The company holds a PEG ratio of 1.18, consistent with the Semiconductor - Circuit Foundry industry's average PEG ratio of 1.18 [3] Industry Overview - The Semiconductor - Circuit Foundry industry is part of the Computer and Technology sector and holds a Zacks Industry Rank of 3, placing it in the top 2% of over 250 industries [4] - The Zacks Industry Rank is based on the average Zacks Rank of individual stocks, indicating that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [4]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher, leveraging established price movements for profitable trades [1] Company Overview: TSMC (TSM) - TSMC currently holds a Momentum Style Score of A, indicating strong momentum characteristics [1] - TSMC has a Zacks Rank of 2 (Buy), which is associated with a historical outperformance in the market [2] Price Performance - TSM shares have increased by 5.86% over the past week, matching the performance of the Zacks Semiconductor - Circuit Foundry industry [3] - Over the last month, TSMC's stock price rose by 6.7%, consistent with the industry's performance [3] - In the past quarter, TSMC shares have surged by 39.49%, and over the last year, they have risen by 74.77%, significantly outperforming the S&P 500, which increased by 7.78% and 27.35% respectively [3] Trading Volume - TSMC's average 20-day trading volume is 14,940,246 shares, which serves as a bullish indicator when combined with rising stock prices [3] Earnings Outlook - In the last two months, TSMC has seen 2 upward earnings estimate revisions for the full year, with no downward revisions, raising the consensus estimate from $6.10 to $6.16 [4] - For the next fiscal year, 3 estimates have been revised upwards, with no downward revisions during the same period [4] Conclusion - TSMC is positioned as a 2 (Buy) stock with a Momentum Score of A, making it a strong candidate for near-term investment opportunities [5]

Core Insights - The article discusses the investment position of Parkev Tatevosian, CFA, and his affiliation with The Motley Fool, highlighting the company's recommendation of Taiwan Semiconductor Manufacturing [1] Company and Industry Summary - Parkev Tatevosian has no personal investment in the stocks mentioned, indicating a potential focus on unbiased analysis [1] - The Motley Fool holds positions in and recommends Taiwan Semiconductor Manufacturing, suggesting confidence in the company's future performance [1] - There is a disclosure policy in place by The Motley Fool, which may affect the perception of the recommendations provided [1]