ai boom: asml and tsmc poised to beat earnings expectations
Amsterdam, Monday, 14 July 2025.
asml holding and tsmc are expected to exceed q2 earnings projections. this surge is fueled by intense demand for ai chips. asml’s euv lithography sales play a crucial role. tsmc leverages its technology leadership and attractive valuations. asml however faces risks from china export restrictions. tsmc’s ai driven revenue is up 59%. investors should watch geopolitical factors when considering these stocks.
tsmc’s q2 performance
Taiwan Semiconductor Manufacturing Co. (TSMC) is set to announce its Q2 earnings on July 17, 2025, before the US market opens [4]. The company’s Q2 revenue reached a record NT$933.792 billion, a 39 % year-over-year increase and an 11% increase sequentially, driven by strong AI-fueled demand for high-performance computing (HPC) [4]. However, significant foreign exchange fluctuations led to Q2 dollar revenue of approximately $29.2 billion, at the high end of the $28.4 - $29.2 billion guidance range, based on an exchange rate of 31.9 NTD per USD [4].
margin pressures on tsmc
Gross margin is a key focus for TSMC’s earnings report [4]. In the short term, TSMC faces gross margin pressure from currency exchange rates and its Arizona plant [4]. TSMC previously indicated that a 1% appreciation in the NTD/USD exchange rate would decrease gross and operating margins by 0.4 percentage points [4]. The NTD appreciated approximately 7% in Q2, potentially dragging gross margins by nearly 3 percentage points [4]. TSMC’s Q2 gross margin guidance was 57%-59%, while the current market consensus is in the 57%-58% range [4].
ai demand and revenue
TSMC’s primary growth driver remains its AI chip manufacturing business [4]. Nvidia’s GB300 series and Google’s TPU v6e are expected to ramp up in the second half of the year, potentially setting new records in the HPC sector [4]. Morgan Stanley suggests that TSMC is a wise investment choice, anticipating that the company may raise its full-year sales guidance due to strong demand in the AI sector [6]. TSMC’s previous guidance indicated an approximate 40% annualized return for AI business over the next five years [7].
factors influencing asml
ASML’s sales of EUV lithography systems are a significant factor in its projected earnings [1]. However, potential export restrictions to China pose a risk [1]. Geopolitical tensions and trade policies could impact ASML’s operations and market access, influencing investor sentiment [1]. Investors should monitor these developments closely to assess the potential impact on ASML’s stock value [1]. The effective tariff rate has increased from 3% at the beginning of the year to 13%, with Goldman Sachs economists projecting it to reach 17% [5].
market outlook and valuation
The S&P 500 index has reached a new high, with a forward price-to-earnings ratio of 22, which is high relative to its historical range [5]. UBS suggests that while valuations are currently elevated due to slower growth expectations, the resilience of AI could temporarily support these valuations [5]. TSMC’s current price-to-earnings ratio is 27.03, which is within its historical median range and lower than the semiconductor industry average of 46.15 [4]. This suggests that TSMC may be undervalued compared to its peers, presenting a potential investment opportunity [4].