Taiwan Semiconductor Smashes Q3 Earnings Target. But Stock Retreats.

Core Insights - Taiwan Semiconductor Manufacturing Company (TSMC) reported earnings of $2.92 per share on sales of $33.1 billion for Q3, surpassing analyst expectations of $2.63 per share and $32.07 billion in sales [2][3] - TSMC's stock reached an all-time high following the earnings report, reflecting strong market confidence [1][3] Financial Performance - TSMC's Q3 earnings increased by 49.7% year-over-year from $1.95 per share, while sales rose by 40.3% from $23.62 billion [2] - For the current quarter, TSMC anticipates revenue between $32.2 billion and $33.4 billion, exceeding Wall Street's target of $31.55 billion [3] Technology and Market Demand - Advanced process technologies drove TSMC's performance, with 3-nanometer chips contributing 23% and 5-nanometer chips 37% to total wafer revenue [4] - Advanced technologies (7-nanometer and smaller) accounted for 74% of total wafer revenue, indicating a strong demand for cutting-edge chips [4] Industry Position and Analyst Sentiment - TSMC produces chips for major companies including AMD, Apple, Nvidia, and Qualcomm, benefiting from increased production of AI data center chips, particularly for Nvidia [5] - Analyst Charles Shi raised his price target for TSMC stock from $270 to $360, citing strong Q3 results driven by AI chip production and operational efficiency [5] Stock Market Performance - TSMC stock is featured on four IBD lists: IBD 50, Stock Spotlight, Global Leaders, and Tech Leaders, highlighting its strong market position [6]