TSMC(US:TSM) HTSC·2025-07-18 01:50Investment Rating - The report maintains a "Buy" rating for the company with a target price of $300 [7][24]. Core Insights - The company reported Q2 2025 revenue of $30.07 billion, exceeding guidance due to strong demand for 3nm and 5nm processes, with a gross margin of 58.6% [1][12]. - The company raised its 2025 revenue growth guidance to approximately 30%, up from nearly 25% previously, and expects capital expenditures to remain between $38 billion and $42 billion [1][14]. - The report highlights the ongoing strong demand for AI and HPC, with HPC revenue increasing by 14% quarter-over-quarter, now accounting for 60% of total revenue [2][12]. Revenue and Profitability - The company expects Q3 2025 revenue to be between $31.8 billion and $33.0 billion, with a gross margin forecast of 55.5% to 57.5% [1][14]. - The revenue forecast for 2025-2027 has been adjusted upward by 1.9%, 1.7%, and 1.1% respectively, while net profit estimates have been adjusted to NT$1,528 billion, NT$1,820 billion, and NT$2,156 billion [5][24]. Capacity and Technology - The company maintains its capital expenditure budget for 2025 at $38 billion to $42 billion, with ongoing production plans for N2 and A16 processes [4][30]. - The report emphasizes the tight supply-demand balance for N3 and N5 nodes, with expectations for increased AI product transitions to N3 in the coming years [31]. Market Position and Valuation - The company is positioned as a leader in semiconductor foundry services, with a projected PE ratio of 25x for 2026, compared to a median of 21x for comparable companies [5][26]. - The target price of $300 reflects a significant increase from the previous target of $227.98, based on the anticipated growth in earnings per share [24][26].