AI Momentum Powers Record Growth in Q3: Is TSMC Stock a Buy Now?

Core Insights - TSMC reported strong growth in Q3, driven by high demand for advanced semiconductor technologies, particularly in AI, HPC, and smartphones [1][3] - The company's stock has seen a year-to-date increase of 52%, although it has decreased by 3.6% from its 52-week high [2] Financial Performance - Total revenue for Q3 reached $33.1 billion, marking a 40.8% year-over-year increase, primarily due to robust orders for 3-nanometer and 5-nanometer process technologies [3] - Gross margin improved to 59.5%, supported by cost savings and higher capacity utilization, while earnings per share rose by 39% year-over-year [3] Business Segments - The HPC segment accounted for 57% of overall revenue, benefiting from ongoing AI infrastructure investments [4] - Smartphone revenue increased by 19% quarter-over-quarter, contributing 30% to total sales, driven by new product launches and a resurgence in device demand [4] - Other markets such as IoT and automotive grew by 20% and 18%, respectively, while traditional consumer electronics saw a decline of 20% due to reduced discretionary spending [5] Future Outlook - TSMC's CEO indicated that AI-related demand will continue to be the main growth driver through 2025 and beyond, with increasing computation needs from consumer AI and enterprise AI [6]