Taiwan Semiconductor's Pre-Q3 Earnings: ETFs in Focus

Earnings and Revenue Estimates - The Zacks Consensus Estimate for Q3 2024 earnings is $1.74 per share on revenues of$22.72 billion [1] - September sales were NT$251.87 billion ($7.82 billion), up nearly 40% YoY, contributing to Q3 2024 revenue of NT$759.69 billion ($23.58 billion), exceeding both analyst expectations and the company's own outlook [2] - Sales estimates for Q3 2024, Q4 2024, FY 2024, and FY 2025 are $22.72B,$24.21B, $85.62B, and$105.73B respectively, with YoY growth estimates of 31.48%, 23.36%, 23.55%, and 23.49% [5] - Earnings estimates for Q3 2024, Q4 2024, FY 2024, and FY 2025 are $1.74,$1.87, $6.45, and$8.28 respectively, with YoY growth estimates of 34.88%, 29.86%, 24.52%, and 28.40% [6] Stock Performance and Valuation - TSMC stock has gained roughly 75% this year, trading near record levels [1] - The stock has a trailing P/E ratio of 33.28X, Price/Book ratio of 8.17X, and Price/Cash Flow ratio of 21.80X, slightly higher than industry averages [7][8] - The average price target from analysts is $204.71, representing a 10.2$185.78 [9] Growth Drivers and Industry Position - AI-related chip demand is a major growth driver, with AI-related chips expected to grow at a 50% CAGR through 2028, potentially making up the low teens of overall revenue [4] - TSMC's aggressive R&D investments, including its 2nm chip design, support its dominant position in the semiconductor industry [4] - The company operates in a top-ranked Zacks industry (top 1%) and sector (top 13%) [3] ETFs and Investment Options - TSMC-heavy ETFs include SP Funds S&P World (ex-US) ETF (15.75% weight), SP Funds S&P Global Technology ETF (15.50% weight), Matthews Emerging Markets ex China Active ETF (14.41% weight), and VanEck Semiconductor ETF (12.65% weight) [10]