Shares of the Taiwanese chip manufacturer started the new year with a bang, climbing 8% year-to-date (YTD). The latest burst of positive momentum was driven by its upbeat Q4 results and guidance.Founded in 1987 by former Texas Instruments executive Morris Chang, along with Taiwan’s government and other partners, Taiwan Semiconductor Manufacturing Company has grown into the world’s leading manufacturer of high-performance chips, particularly those used in AI data centers, vehicles, and mobile devices. TSMC i ...

Core Insights - Taiwan Semiconductor Manufacturing Company (TSMC) reported its slowest monthly sales growth in over 18 months, with October revenue reaching 367.47 billion New Taiwan dollars ($11.86 billion), marking a 17% year-over-year increase, the slowest since February 2024 [3][4][6] - Despite the slowdown in sales growth, TSMC raised its 2025 revenue growth guidance to the mid-30% to 40% range, driven by a projected doubling of AI-related chip revenue [4][5] - Nvidia remains TSMC's most significant customer in the AI sector, with indications of strong demand, as Nvidia's CEO requested a 50% increase in TSMC's 3-nanometer wafer production [4][6][7] Revenue and Growth - TSMC's October revenue of $11.86 billion is a new monthly record, but the 17% growth is the slowest annual growth rate since February 2024 [3][4] - The company has adjusted its revenue growth forecast for 2025 to the mid-30% to 40% range, up from about 30% in U.S. dollar terms, primarily due to AI-related chip revenue [5][6] - TSMC anticipates that AI-related chip revenue will double in 2025 and grow at a mid-40% annual rate over the next five years [5][6] Market Reaction - TSMC's American depositary receipts rose by 3.6% in morning trading, contributing to a 45% gain for the year up to the previous Friday's close [7]

Core Viewpoint - Qualcomm's stock has shown moderate performance with a year-to-date increase of approximately 3% amid U.S.-China trade uncertainties, but the company reported strong Q2 FY'25 results, with revenue up 15% year-over-year to $10.84 billion and earnings per share at $2.85, driven by a rebound in the smartphone market [2][3] Revenue Growth - Qualcomm's revenue has grown at an average rate of 5.3% over the past three years, slightly below the S&P 500's 5.5% growth [5] - In the last 12 months, Qualcomm's revenue increased by 12.1%, from $36 billion to $42 billion, compared to the S&P 500's 5.5% growth [5] - Quarterly revenues rose by 17.5% to $11 billion from $9.4 billion a year prior, outperforming the S&P 500's 4.8% improvement [5] Profitability Metrics - Qualcomm has a price-to-sales (P/S) ratio of 4.2, compared to 3.0 for the S&P 500 [7] - The company's price-to-free cash flow (P/FCF) ratio is 12.4, while the S&P 500 stands at 20.5 [7] - Qualcomm's price-to-earnings (P/E) ratio is 16.2, significantly lower than the S&P 500's 26.4 [7] - The operating margin for Qualcomm is 26.4%, compared to 13.2% for the S&P 500, indicating strong profitability [8] Financial Stability - Qualcomm's debt is $15 billion, with a market capitalization of $176 billion, resulting in a debt-to-equity ratio of 8.5%, lower than the S&P 500's 19.9% [10] - Cash and cash equivalents amount to $14 billion out of $55 billion in total assets, leading to a cash-to-assets ratio of 25.7%, compared to 13.8% for the S&P 500 [10] Downturn Resilience - Qualcomm's stock has shown slightly better performance than the S&P 500 during recent downturns, including a 45.1% decline during the inflation shock of 2022, compared to a 25.4% decline for the S&P 500 [12] - The stock fully recovered to its pre-crisis peak by May 2024 and has since risen to around $160 [12] - Historical performance during the COVID-19 pandemic and the global financial crisis also indicates resilience, with Qualcomm recovering fully from significant declines [12][13] Overall Assessment - Qualcomm's operational performance and financial standing are assessed as very strong across key metrics, making the stock appealing at its current valuation [3][15]