TSMC(US:TSM) ZACKSยท2024-07-29 12:55Core Insights - Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) is a leading player in the AI chipset market, benefiting from a surge in demand for advanced chip technologies [1][2] - The company reported strong financial results for Q2 2024, driven by a boom in 3-nanometer chipsets, with significant revenue growth across various segments [1][3] Financial Performance - TSM's Q2 2024 revenue increased significantly, with High-Performance Computing up 28%, Digital Consumer Electronics up 20%, IoT up 6%, and Automotive up 5%, while Smartphone sales only dipped 1% [1] - For Q3 2024, TSM projects revenues between $22.4 billion and $23.2 billion, with a year-over-year growth estimate of 31.5% for Q3 and 23% for the full year [3] - The consensus estimate for Q3 2024 earnings is $1.69 per share, reflecting a 31% year-over-year growth, with 2024 earnings expected at $6.37 per share, indicating an 18.9% increase [3][4] Clientele and Market Position - TSM is the largest manufacturer for NVIDIA and serves other major clients like AMD, Apple, Broadcom, and Intel, indicating a robust clientele [2] - The company is ramping up production of 3nm and developing 2nm technologies, contributing to its revenue growth [2] Industry Outlook - TSM is positioned in the top 1% of the Zacks Defined Semiconductor - Circuit Foundry Industry, suggesting strong industry performance in the coming months [5] - The company maintains a reasonable valuation with a forward P/E of 25.16x, P/S of 10.85x, and P/B of 7.13x, aligning with industry averages [5] Stock Performance - TSM's stock price reached an all-time high of $193.47 on July 11 but fell 16.3% due to market fluctuations related to AI [7] - Despite the recent decline, the stock has increased nearly 57% year-to-date, with brokerage firms projecting a 27.7% increase from the last closing price of $161.94 [7][8]