tsmc's stock surge rides high on robust earnings
Hsinchu, Thursday, 30 January 2025.
The stock of Taiwan Semiconductor Manufacturing Company (TSMC) saw a significant rise following its impressive quarterly earnings report. Shares climbed 4% to $200.01, witnessing a trading volume of 22.12 million shares. This surge reflects strong investor confidence driven by earnings figures showing a revenue of $90.116 billion, net profit of $36.53 billion, and a gross profit of $50.575 billion. With a P/E ratio of 28.98, analysts remain optimistic, with overwhelming recommendations to buy. The semiconductor giant, renowned for its pioneering technology, stood out in the sector, outperforming competitors like Nvidia and reinforcing its position as a key player. TSMC continues to meet robust demand from major clients including Apple and AMD. Despite industry challenges such as a recent earthquake in Taiwan, TSMC managed a quick recovery, maintaining operations and further bolstering investor trust.
Market leadership and AI-driven growth
TSMC’s dominant position in the semiconductor industry, holding over 58% market share [1], is further strengthened by growing AI chip demand. Morgan Stanley analysts project a compound annual revenue growth rate of 15-20% over the next five years [2]. The company’s gross margin is expected to increase from 55% to 55.5% in Q4, driven by strong AI chip orders and increased production of Apple’s 3nm chips [2].
Exceptional quarterly performance
The company’s Q3 2024 results exceeded market expectations, with consolidated revenue reaching NT$759.69 billion ($23.50 billion), marking a 39% year-over-year increase [3]. The sequential growth was equally impressive at 12.8% [3]. This performance has garnered strong analyst confidence, with 96% recommending a buy and 4% suggesting a hold [1].
Future revenue projections
TSMC’s AI-related revenue is projected to reach NT$4,341 billion in 2024, surpassing $10 billion for the first time [4]. The company anticipates doubling this figure to NT$8,683 billion by 2025 [4]. This growth is supported by continued orders from key clients like NVIDIA and AMD, along with increasing demand from cloud service providers developing custom AI chips [4].