Investment Rating - The report assigns an "Overweight" rating to TSMC with a price target of NT$1,275.0 by December 2025 [4][6]. Core Insights - TSMC's 2Q25 sales were NT$934 billion, reflecting an 11% quarter-over-quarter increase and a 39% year-over-year increase, driven by strong demand for N3 and accelerated AI shipments [3][4]. - The company is expected to raise its FY25 revenue guidance to high 20% growth in USD terms, supported by robust AI demand and minimal order reductions from major clients like Apple [3][6]. - For FY26, TSMC is projected to achieve 14% year-over-year revenue growth, driven by price hikes and strong demand for N2 and N3 processes [3][6]. Summary by Sections Financial Performance - TSMC's June revenue was NT$264 billion, down 18% month-over-month but up 27% year-over-year [3]. - The 2Q GM is expected to fall within the company's guidance range of 57-59%, despite the TWD appreciating by 11% [3]. Future Outlook - For 3Q25, TSMC is expected to guide for 3-6% quarter-over-quarter revenue growth, primarily due to ongoing strong demand for N3 and N4/N5 [3]. - The company anticipates a decline in GM due to the impact of TWD appreciation [3]. Key Topics for Earnings Meeting - Key discussion points for the upcoming earnings meeting include demand visibility for AI, growth expectations for 4Q25, and the potential impact of TWD appreciation on GM [3][4]. Valuation - The price target of NT$1,275 is based on approximately 20x 12-month forward P/E, reflecting positive demand drivers and a stronger ramp for N2 in 2026 [6][7].

Investment Rating - The report maintains a "Buy" rating for TSMC, with an "Overweight" (OW) stance, suggesting accumulation ahead of the earnings print due to low expectations [1][6]. Core Insights - TSMC's preliminary revenue for 2Q25 was NT$933 billion, reflecting an 11% quarter-over-quarter (Q/Q) increase in TWD, translating to approximately US$29.6 billion, which is a 16% Q/Q increase in USD, exceeding both the company's guidance and Morgan Stanley's estimates [2][3]. - The likelihood of TSMC raising its full-year revenue guidance has increased, with expectations of a 27% year-over-year (Y/Y) growth in USD, driven by strong AI demand and tight leading-edge capacity [3][13]. - The report highlights that TSMC's fab utilization in the second half of 2025 remains robust despite lukewarm demand in smartphones and PCs, indicating a potential shift in demand dynamics [3][13]. Revenue and Earnings Guidance - TSMC is expected to raise its 2025 full-year revenue guidance from mid-20% to high-20% due to strong AI demand, with 3Q25 revenue projected to increase by 1% Q/Q in USD [17][18]. - The report forecasts a gross margin decline to 55.6% in 3Q25, with TWD revenue potentially decreasing by nearly 4% Q/Q due to TWD appreciation [15][17]. - The preliminary EPS estimate for 2Q25 is NT$14.40, with a gross margin around 57% [17]. Price Target and Valuation - The price target for TSMC remains NT$1,288, implying a 17% upside from the current share price of NT$1,100 [6][56]. - TSMC is trading at 17x the estimated EPS for 2026, which is considered attractive, with expectations of a re-rating to 20x due to increased bargaining power and sustainable AI demand [18][56]. Market Dynamics and Demand Drivers - The report notes that TSMC's wafer pricing strategy may be influenced by FX impacts, with expectations of a 3-5% price hike in 2026 due to strong demand and TWD appreciation [26][30]. - AI demand is projected to significantly contribute to TSMC's revenue, with expectations that cloud AI revenue will grow from 13% in 2024 to 34% by 2027 [37][40]. Semiconductor Tariffs and Regulatory Environment - The report discusses the potential for TSMC to receive an exemption from semiconductor tariffs due to its significant investment in US production, which could mitigate revenue risks associated with such tariffs [4][25].

Group 1: Company Performance - GE Aerospace's stock has increased over 50% year to date and over 300% in the last three years [1] - Taiwan Semiconductor's stock has gained 15% year to date and over 160% in the last three years [1] Group 2: Earnings Expectations - GE Aerospace's Q2 earnings are expected to rise 19% to $1.43 per share, with sales projected to climb 18% to $9.7 billion [3] - Taiwan Semiconductor's Q2 EPS is anticipated to increase 60% to $2.37, with sales expected to grow 44% to $30.04 billion [5] Group 3: Earnings Surprises - GE Aerospace has surpassed the Zacks EPS Consensus for 10 consecutive quarters, with an average earnings surprise of 17.97% [4] - Taiwan Semiconductor has exceeded earnings expectations for 18 consecutive quarters, with an average EPS surprise of 6.91% [7] Group 4: Future Estimates - FY25 and FY26 EPS estimates for GE Aerospace and Taiwan Semiconductor have trended higher over the last 60 days [8]

Core Viewpoint - Technology stock valuations are at all-time highs, but there are undervalued opportunities, particularly in Taiwan Semiconductor Manufacturing (TSMC) [1][2][3] Company Overview - TSMC specializes in fabrication and foundry services, holding a 68% share of the global wafer foundry market [5][6] - The company plays a crucial role in the semiconductor supply chain, supporting major players like Nvidia and AMD [4][6] Market Trends - The total addressable market for semiconductors is projected to reach $996 billion by 2033, up from $530 billion two years ago [8] - The semiconductor foundry market is expected to grow at an 8.5% compound annual growth rate (CAGR) from 2024 to 2033, reaching $276 billion [8] - AI infrastructure spending could approach $7 trillion by the middle of the next decade, with chips and related hardware for AI data centers receiving nearly half of this investment [9] Growth Prospects - Rising demand for chips is a direct tailwind for TSMC's foundry business, with analysts forecasting continued revenue and earnings acceleration [11][14] - TSMC's current forward price-to-earnings (P/E) ratio of 24.3 indicates it is trading at a discount compared to other leading chip stocks [12][15] Investment Opportunity - TSMC is viewed as a hidden bargain amidst overpriced growth stocks, presenting a compelling buy-and-hold opportunity for long-term investors [16]

Group 1 - Kennedy is a GARP-themed investor focusing on companies with aggressive growth prospects that are expected to become highly profitable within 1-2 years [1] - The investment philosophy emphasizes long-term discipline, consistent alpha generation, and a consideration of risk [1] - The Curious Analyst is an associate of Kennedy Njagi, indicating a collaborative approach in investment analysis [1] Group 2 - The article does not provide specific financial data or performance metrics related to any companies or industries [2]

Core Viewpoint - Taiwan Semiconductor Manufacturing Company Ltd. (TSM) is expected to exceed earnings expectations for Q2 2025, with a projected EPS of $2.37, reflecting a 60.1% year-over-year increase [1][6]. Financial Performance - The Zacks Consensus Estimate for TSM's Q2 earnings is $2.37 per share, revised upward by 3 cents over the past week [1][2]. - Revenue expectations for TSM are between $28.4 billion and $29.2 billion, with the consensus estimate at $30.04 billion, indicating a 44.3% increase from the previous year [2][5]. Earnings Surprise History - TSM has a strong earnings surprise history, having outperformed the Zacks Consensus Estimate in the last four quarters with an average beat of 6.9% [3]. Earnings ESP and Zacks Rank - TSM has an Earnings ESP of +3.25%, indicating a favorable outlook for earnings performance [4]. - The company holds a Zacks Rank of 2 (Buy), suggesting positive market sentiment [4]. Industry Dynamics - The semiconductor industry is experiencing a rebound driven by the increasing demand for artificial intelligence (AI) applications, which is a significant growth catalyst for TSM [5][6]. - TSM's leadership in advanced chip technologies, particularly in 3nm and 5nm processes, is expected to contribute to its growth [6][8]. Strategic Investments - TSM is investing heavily in next-generation technologies, with a capital expenditure forecast of $38 billion to $42 billion for 2025, focusing on advanced manufacturing processes [20]. - The company is expanding into high-performance computing (HPC) and smartphone sectors, which are anticipated to enhance its performance [8][9]. Market Position and Valuation - TSM shares have increased by 16.7% year-to-date, outperforming the Zacks Computer and Technology sector's 7.4% rise [11]. - TSM is trading at a forward 12-month P/E of 22.48X, lower than the sector average of 27.39X and peers like NVIDIA and AMD [14][17]. Future Outlook - AI-related revenues for TSM tripled in 2024 and are expected to double again in 2025, with a projected 40% compound annual growth rate over the next five years [19]. - The company's strategic focus on growth opportunities is likely to continue boosting its financial performance [20][21].

Investment Rating - The report maintains an "Overweight" rating for GigaDevice and AP Memory, while upgrading AP Memory's price target to NT$390.00 from NT$235.00 [6][12][13]. Core Insights - The wafer-on-wafer (WoW) stacking technology is expected to significantly enhance edge AI computing capabilities by improving memory bandwidth and reducing power consumption, thus facilitating the adoption of advanced AI tools in various devices [8][10][39]. - The total addressable market (TAM) for WoW technology is projected to grow from US$10 million in 2025 to US$6 billion by 2030, indicating a compound annual growth rate (CAGR) of 257% [10][40][84]. - Specialty memory players are anticipated to benefit the most from WoW technology due to their technological readiness and market positioning [12][13][40]. Summary by Sections Industry View - The report highlights a shift in investment ratings for specific companies, with GigaDevice's price target raised to Rmb169.00 and AP Memory upgraded to "Overweight" [6]. Key Takeaways - WoW technology is set to unlock the potential of edge AI devices by addressing limitations in size, shape, and layout through 3D memory stacking [8]. - The current mainstream solution, high-bandwidth memory (HBM), is not suitable for edge devices due to cost and form factor constraints, making WoW a more viable alternative [9][10]. Market Potential - The TAM for WoW is expected to reach US$622 million by 2027, with significant growth anticipated in the automotive and consumer electronics sectors [40][84]. - The report identifies key beneficiaries of WoW technology, including niche memory players like Winbond and GigaDevice, which are well-positioned to capitalize on the emerging market [12][13][40]. Technology and Adoption - WoW stacking technology is compared favorably against HBM, with potential improvements in memory bandwidth by 10-100 times and a significant reduction in power consumption [10][39]. - The report outlines the main hurdles for edge AI deployment, including power consumption, memory bandwidth, and cost, which WoW technology aims to overcome [38][46].

Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is a crucial player in the AI chip manufacturing space, serving as a reliable partner for AI chipmakers despite not designing chips itself [1][7]. Group 1: TSMC's Market Position - TSMC is recognized as the world's most advanced semiconductor foundry, with major clients including Nvidia, AMD, Broadcom, and Apple, giving it unmatched scale and technological leadership [2]. - The company has a significant market share lead in the advanced node market, outperforming competitors like Intel and Samsung [2]. Group 2: Revenue and Growth - In Q1, TSMC's revenue increased by 35% to $25.5 billion, driven by high-performance computing (HPC) growth, and preliminary Q2 revenue is estimated to have risen by 39% to $31.9 billion [4]. - Chips manufactured on 7nm and smaller nodes accounted for 73% of TSMC's revenue in Q1, up from 65% the previous year, with 3nm nodes contributing 22% [3]. Group 3: Pricing Power and Margins - TSMC's strong pricing power is evident as it raises prices to counteract margin dilution from new fabs, with gross margin rising by 190 basis points to 58.8% in Q1 [4][5]. - The company plans to increase AI chip prices, with Arizona-made chips potentially commanding a 30% premium [5]. Group 4: Future Growth Prospects - TSMC anticipates AI-related revenue to grow at a mid-40% compounded average growth rate (CAGR) over the next five years starting in 2024 [8]. - The company is also positioned to benefit from the growth of autonomous driving and robotaxis, which will require advanced chips [9]. Group 5: Investment Appeal - TSMC is viewed as a safe investment in the AI semiconductor space, as it provides manufacturing services to all major players without needing to bet on a single chipmaker [11]. - The stock is attractively valued, trading at a forward P/E ratio of 24 based on 2025 estimates and a PEG ratio of less than 0.7, indicating it is undervalued [12].

Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) has recently joined the trillion-dollar club, highlighting its significant growth and market leadership in the semiconductor industry Group 1: Market Position and Leadership - TSMC holds approximately 70% market share in the semiconductor foundry market, far surpassing its closest competitors, with no foreseeable path for rivals to catch up [3] - The company is a critical supplier for major tech firms, including Apple, Nvidia, Tesla, and AMD, indicating its integral role in the tech ecosystem [4] Group 2: Financial Performance - In Q1, TSMC reported revenue of $25.5 billion, reflecting a 35% year-over-year increase, with net income rising 60% year-over-year in local currency, showcasing strong financial health [5] - TSMC's customers typically engage in long-term contracts, contributing to predictable revenue streams [7] Group 3: Growth Drivers - Demand for AI chips is surging, with management estimating a compound annual growth rate (CAGR) in the mid-40% range for AI accelerator revenue until 2029 [8] - TSMC is expanding its operations internationally, establishing manufacturing plants in the U.S., Germany, and Japan to mitigate geopolitical risks associated with Taiwan [10] Group 4: Competitive Advantages - The semiconductor industry has high barriers to entry, requiring significant capital investment and advanced technology, which keeps competitors at bay [9] - TSMC has a monopoly on the production of the most advanced semiconductors, with smaller manufacturing nodes (e.g., 7nm, 5nm, 3nm, and upcoming 2nm) that enhance performance [14] Group 5: Investment and Future Outlook - TSMC is committed to growth, with capital expenditures expected to rise from over $30 billion in 2024 to between $38 billion and $42 billion in the current year, aligning with increasing demand for AI chips [15][17] - The company has demonstrated resilience since its inception in 1987, successfully navigating economic cycles and technological changes, positioning itself for long-term growth [18]

Group 1: Visa's Growth Potential - Visa processed $13.2 trillion in digital payments through 233.8 billion transactions last year, with 4.8 billion cards in circulation [4][5] - Visa benefits from multiple tailwinds including income growth, increased consumer spending, and the shift from cash to digital payments [5][6] - Revenue has increased by 171% over the past 10 years, and the company is focusing on value-added services which grew revenue by 22% year over year last quarter [6][7] - Visa's profit margins are high at 66%, and operating income is expected to double to between $50 billion and $100 billion in the next 10 years [8][9] Group 2: Taiwan Semiconductor's Explosive Growth - Taiwan Semiconductor Manufacturing Company (TSMC) is the leading manufacturer of advanced semiconductors, with a revenue growth of 250% over the past 10 years to $97 billion [11][14] - TSMC's growth is driven by the increasing demand for AI-related chips from customers like Nvidia and Advanced Micro Devices, with expectations for revenue to exceed $250 billion in the next decade [13][14] - With profit margins around 45%, TSMC could achieve over $100 billion in annual earnings, positioning it alongside current technology giants [14][15]