tsmc faces headwinds: what to expect from upcoming earnings
new york, Wednesday, 16 April 2025.
Bank of America has tempered expectations for TSMC’s stock. An analyst report cites concerns about tariffs, potential AI supply chain disruptions, and the impact of the recent earthquake in Taiwan. These factors are influencing investor sentiment. TSMC shares have already fallen 42% since January. Despite these challenges, the analyst maintains a ‘buy’ rating. The price objective is USD$240, suggesting a potential 54% upside. The first quarter earnings, due Thursday, are expected to show revenue of NT$830 billion.
analyst expectations
Brad Lin, a Bank of America analyst, projects TSMC’s Q1 earnings per share (EPS) to be NT$13.1 [1]. He expects revenue of NT$830 billion, reflecting a 4% sequential decline but a 40% year-over-year increase [1]. Lin anticipates a gross margin of approximately 57.3% for the quarter [1]. Looking ahead to the second quarter of 2025, Arya forecasts a 5.7% increase in revenue compared to the previous quarter [1]. The gross margin is expected to improve to 58.1% [1].
revised outlook
Arya has revised the revenue growth forecast for the full year to 25% in NT$ terms, a decrease from the previous estimate of 30% [1]. Despite this adjustment, Lin suggests that TSMC’s competitiveness and growth potential remain attractive [1]. However, he acknowledges that supply chain bottlenecks and tariffs could cloud the outlook [1]. Lin also noted that it would be an upside surprise if TSMC maintains its 2025 revenue guidance of a 25% year-over-year increase [1].
market sentiment and valuation
TSMC’s stock analysis suggests cautious optimism amid macro risks and tariff implications [4]. On April 14, 2025, TSMC’s stock closed at $155.84, a 0.79% decrease from the previous closing [4]. The stock’s Relative Strength Index (RSI14) is at 35, indicating it is approaching oversold territory [4]. The Moving Average Convergence Divergence (MACD) is in negative territory at -6.01 [4]. The current support level is $146.80, while resistance is at $158.75 [4].
expert views and potential risks
Ben Barringer, a technology analyst at Quilter Cheviot, believes that both ASML and TSMC are significantly undervalued, with many risks already factored into their stock prices [3]. However, he notes that uncertainty surrounding semiconductor tariffs makes it difficult to foresee a re-rating without more definitive news [3]. Phelix Lee, a Morningstar analyst, suggests that potential sectoral tariffs could increase the risk of investing in U.S.-based data centers, potentially leading to a slowdown in new data center construction [3]. This slowdown could further impact the earnings of TSMC and its supply chain [3].
strategic considerations
Gary Tan, a portfolio manager at Allspring Global Investments, anticipates near-term downside risks to TSMC’s earnings over the next two quarters, despite the company accounting for global trade tensions in its current valuations [3]. JPMorgan estimates that TSMC might slightly reduce its projected 2025 revenue growth from the mid-20% range to the low- to mid-20% range [3]. Nori Chiou, an investment director at White Oak Capital Partners, highlights the rising uncertainty surrounding AI demand for the coming year and the potential impact of policy volatility on long-term planning [3].