is tsmc stock a hidden gem? q2 revenue surges 44%
Taipei, Thursday, 28 August 2025.
Despite a significant 44% jump in Q2 2025 revenue, Taiwan Semiconductor Manufacturing (TSMC) is being called undervalued. The company is critical to the AI revolution. TSMC’s stock growth has not kept pace with other tech companies this year. High-performance computing drove 60% of TSMC’s sales mix in Q2 2025. Smartphone chips accounted for another 27%. Advanced nodes (3nm, 5nm, 7nm) make up nearly 74% of TSMC’s output. The company projects overall revenue growth of 30% in 2025, with AI-related business compounding at 40% annually.
stock performance lags behind peers
TSMC’s stock has increased by about 18% year-to-date [1]. This is less than the gains of AMD (38%), Nvidia (31%), and Intel (around 20%) [1]. Despite its crucial role in the semiconductor supply chain, TSMC’s stock appreciation has been relatively modest [1]. The company’s forward price to earnings multiple is approximately 24x [1]. TSMC holds $86 billion in cash and marketable securities, significantly outweighing its $29 billion in long-term debt [1]. This strong financial position underscores the company’s stability and potential for future growth [GPT].
nvidia ceo praises tsmc
Nvidia CEO Jensen Huang lauded TSMC as one of the greatest companies in history [6]. Huang stated that investing in TSMC stock is a very smart decision [6]. He made these remarks during a visit to Taiwan to thank TSMC for finalizing the designs of six new Nvidia chips [6]. These chips include a new GPU and a silicon photonics processor for Nvidia’s next-generation Rubin architecture supercomputer [6]. Huang’s visit underscores the close collaboration between Nvidia and TSMC in advancing chip technology [GPT].
taiwan stock market impact
On August 28, the Taiwan stock market experienced a downturn, with the weighted index falling by 283 points [4]. This decline was largely attributed to the weak performance of technology stocks, particularly TSMC, whose stock price dropped significantly [4]. TSMC’s stock closed at 1160 yuan, a decrease of 2.52% [4]. This drop in TSMC’s stock price negatively impacted the broader technology sector and the overall market index [4]. Market sentiment was affected by Nvidia’s financial report, which, despite exceeding expectations, presented a cautious outlook [4].
u.s. chips act and tsmc’s expansion
TSMC is set to receive $6.6 billion in funding from the U.S. CHIPS and Science Act to support the construction of three advanced wafer fabs in Arizona [6]. The first fab, P1, began production in the fourth quarter of last year, while P2 is projected to start mass production in 2027 [6]. TSMC’s Arizona plant achieved its first profitable quarter after four years of losses, earning 6.447 billion New Taiwan dollars, which represents 1.62% of TSMC’s Q2 net profit after tax [6]. The long-term profitability of this plant remains to be seen [6].
revenue growth and ai prospects
TSMC’s Q2 2025 revenues increased by 44% year-over-year to $30.07 billion [1]. The company anticipates overall revenue growth of 30% in 2025 [1]. TSMC’s AI-related business is projected to grow at an annual rate of 40% in the near future, starting from the 2024 base [1]. Industry forecasts estimate that AI infrastructure spending will reach $6.7 trillion by 2030 [1]. This positions TSMC to capitalize significantly on the expanding AI market [GPT].