Core Viewpoint - Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) is experiencing strong momentum ahead of its fourth quarter earnings release, with significant revenue growth and positive stock performance [1][2][4]. Financial Performance - TSM reported December 2024 net revenue of NT$278.16 billion (approximately $8.44 billion), reflecting a 57.8% year-over-year increase and a 33.9% annual revenue growth over 2023 [2]. - Wall Street projects fourth quarter EPS at $2.19 and revenue around $26.19 billion, indicating expectations for another strong quarter [3]. Stock Performance - TSM stock has shown impressive gains, up 7.91% over the past month and 5.03% in the last five days, currently trading at $206.17 [2][3]. - Technical indicators suggest a bullish outlook for TSM stock, with key moving averages and an MACD of 3.82, alongside an RSI of 54.07 [3][6]. Market Outlook - Analysts express optimism regarding TSM's market leadership in advanced chip manufacturing, despite challenges in the broader semiconductor industry [4]. - The company's strong revenue performance in December highlights its resilience and market dominance, positioning it well to navigate industry difficulties [4].

Financial Performance - TSMC posted fourth-quarter revenue of NT$868.46 billion ($26.35 billion), beating the NT$854.82 billion consensus estimate [2] - The company's 2024 revenue surged 34% to NT$2.89 trillion compared to 2023 [2][4] Market Reaction - TSMC shares rose 1.25% in premarket trading following the earnings report [1] - The stock increased 1.5% in premarket trading after the announcement [4] Industry Context - TSMC benefits from the artificial intelligence (AI) boom, supplying tech giants like Apple and Nvidia [1][2] - Foxconn, another Taiwanese company, also reported record fourth-quarter revenue driven by strong demand for AI servers [3] Business Operations - TSMC is the world's largest contract chip manufacturer [1][4] - The company supplies major technology companies including Apple and Nvidia [2]

Core Insights - TSMC's net sales increased by 33.9% year-over-year, reaching NT$2.9 trillion ($87.8 billion), driven by high demand for AI technology [2][3] - The company's revenue growth surpassed its previous estimate of nearly 30%, indicating strong ongoing investment in AI infrastructure from major clients like Microsoft and Amazon [3] - TSMC is a key player in the AI revolution, producing advanced microchips essential for Silicon Valley products [3] Company Performance - TSMC's revenue growth reflects a significant increase in demand for chips used in various applications, including Apple's iPhones and Nvidia's AI hardware [2] - The company's shares have more than doubled since the AI boom began in late 2022, following the launch of OpenAI's ChatGPT [4] Geopolitical and Operational Challenges - TSMC faces geopolitical tensions between the U.S. and China, particularly regarding technology import restrictions and trade issues [4] - The semiconductor supply chain is vulnerable to disruptions, prompting governments to encourage TSMC to diversify production locations [5] - TSMC is expanding its manufacturing footprint internationally, with plans for new factories in the U.S. and an existing facility in Japan [5]

Company Performance - Taiwan Semiconductor Manufacturing Co (TSMC) reported fourth-quarter revenue of 868.5 billion New Taiwan dollars ($26.3 billion), a 38.8% year-on-year increase [1] - The revenue surpassed Refinitiv consensus estimates of 850.1 billion New Taiwan dollars [2] Industry Context - TSMC, the world's largest chip manufacturer, benefits from the ongoing AI boom [1] - The company manufactures semiconductors for major global companies, including Apple and Nvidia [2]

TSMC Growth Phase - TSMC is entering an unprecedented growth phase driven by accelerating artificial intelligence infrastructure demand [1] - The semiconductor industry is experiencing a fundamental shift in demand dynamics [1] - TSMC is positioned at the center of this industry transformation [1] Investment Strategy - The research-driven approach focuses on uncovering high-conviction stocks with compelling growth potential [1] - The strategy targets dynamic sectors including big tech, semiconductors, AI, and healthcare [1] - Both low-risk and selective high-risk plays are analyzed for potential outperformance [1] - Each investment idea is backed by thorough research and strategic foresight [1] Analyst Positions - The analyst holds beneficial long positions in NVDA, TSM, AMD, MSFT, GOOG, AVGO, META, and AMZN through stock ownership, options, or other derivatives [2]

Taiwan Semiconductor Manufacturing Company Ltd. (TSM) , the global leader in semiconductor foundry services and also known as TSMC, closed 2024 on a high note, delivering a robust 89.9% gain in a turbulent market. This surge has outpaced the broader market, with the S&P 500 and the Zacks Computer & Technology sector rising 30.5% and 24.4%, respectively.2024 Price Return PerformanceImage Source: Zacks Investment ResearchThis robust performance cements TSMC’s position as a global leader in semiconductor manuf ...

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool. ...

Goldman Sachs analyst Bruce Lu maintained a Buy rating on Taiwan Semiconductor Manufacturing Co TSM with a price target of $254, up from $248.Taiwan Semiconductor will host its fourth-quarter analyst meeting on Jan. 16. Lu expected another year of solid revenue growth in 2025E by 26.8% for Taiwan Semiconductor, following 29.4% revenue growth in 2024E (all in USD terms), driven by strong demand in leading-edge nodes mainly supported by continuous strong momentum from AI.Also Read: AI Chip Stocks Nvidia, Broa ...

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Core Viewpoint - Taiwan Semiconductor Manufacturing Company (TSMC) is experiencing a significant revenue growth driven by the demand for AI chips, with projections indicating that AI revenue will triple in 2024, contributing to a mid-teens percentage of total revenue [3][8]. Group 1: Revenue Growth and Projections - TSMC's AI chip sales are expected to grow at a compound annual rate of 50% over the next five years, with AI chips projected to account for a low teens percentage of revenue by the end of that period [8]. - The company's operating revenue has shown impressive growth, with a quarterly year-over-year growth rate of 36.40% [5]. - Management has indicated that there are no signs of growth slowing down as TSMC heads into 2025, suggesting that the favorable trends observed in 2020 are likely to continue [3][11]. Group 2: Market Position and Valuation - TSMC is the world's largest third-party chip manufacturer, supplying chips to major clients like Nvidia and Apple, which positions the company favorably in the semiconductor industry [13]. - The current valuation of TSMC is slightly above where it was at the beginning of 2020, but it remains in a range that suggests potential for significant growth, similar to the conditions that led to a doubling of the stock in the past [4][10][15]. - The stock was trading at around 19 times earnings at the start of 2024, indicating that it was undervalued compared to other businesses, which may have contributed to its price increase [9]. Group 3: Technological Advancements - TSMC is advancing its technology with the rollout of 2nm chips expected later in 2025, following the successful implementation of the 3nm process node, which enhances chip density and processing power [2][7]. - The company has a history of launching advanced chips, having previously introduced its 5nm chips during a period of significant demand, which parallels the current market conditions [14].