Taiwan Semiconductor Manufacturing (TSM) stock is soaring Thursday and is on track to close with a trillion-dollar market cap for the first time ever. This comes after the integrated circuits and chip manufacturer beat top- and bottom-line expectations for its third quarter and issued a strong outlook for its fourth quarter.
In the three months ended September 30, the Taiwan-based company, whose clients include Magnificent 7 stocks Nvidia (NVDA) and Apple (AAPL), said net revenue increased 36% year-over-year to $23.5 billion. Earnings per share (EPS) were up 50.4% from the year-ago period to $1.94.
The results exceeded analysts' expectations for revenue of $23.1 billion and EPS of $1.80, according to Yahoo Finance.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3 nanometer and 5 nanometer technologies," said Taiwan Semiconductor Chief Financial Officer Wendell Huang in a statement. "Moving into fourth quarter 2024, we expect our business to continue to be supported by strong demand for our leading-edge process technologies."
For Q4, TSM said it anticipates revenue in the range of $26.1 billion to $26.9 billion. This is well ahead of the $24.9 billion in sales Wall Street is anticipating.
Is Taiwan Semiconductor stock a buy, sell or hold?
Taiwan Semiconductor has had a stellar run on the price charts in 2024, more than doubling in value for the year to date. Unsurprisingly, analysts are very bullish on the semiconductor stock.
According to S&P Global Market Intelligence, the average analyst target price for TSM stock is $219.01, representing implied upside of nearly 4% to current levels. Additionally, the consensus recommendation is Strong Buy.
Speaking for the bulls is financial services firm Needham, which has a Buy rating and $210 price target on TSM stock.
"We look for TSMC's revenue growth, primarily driven by steady introductions of new technology nodes that are largely unaffected by industry cyclicality, to remain strong and support a 15-20% earnings compound annual growth rate (CAGR) over the next few years," says Needham analyst Charles Shi. "As such, we recommend TSM stock as a core holding for investors who look to invest in semiconductors, which we view as the foundation of the expanding digital economy."
Related Content
-
Is the EV Tax Credit Going Away? What You Need to KnowTax Credits There's a lot of chatter about the President-elect's plans to eliminate the electric vehicle tax credit. Here's what's happening.
-
Being Nimble Is Key to This Fidelity Bond Fund's OutperformanceThe Fidelity Total Bond ETF has done well over the long term as managers adjust to changing tides.
-
Why This Fidelity Bond ETF Has Outperformed Over the Long Term
The Fidelity Total Bond ETF has done well over the long term as managers adjust to changing tides.
-
10 Inefficiencies I Look for on Rich Retirees' Tax ReturnsYour tax return could hold clues to several missed opportunities and important gaps in your retirement planning.
-
Estate Planning: How Does the Basis Step-Up Rule Work?The step-up in basis, one of the most powerful tools in estate and tax planning, can make a huge difference in capital gains taxes owed.
-
Stock Market Today: Stocks Drop as Post-Election Party EndsIt was a red finish on Wall Street Friday with tech stocks selling off ahead of Nvidia's upcoming earnings event.
-
Will You Pay Taxes on Your Social Security Benefits?You might, depending on your income, but smart financial planning now can help lower or even eliminate your taxes in the future.
-
A Simple Trick for Better Investing: Stop Timing the MarketInvestors who stay the course are rewarded for their patience and discipline, enjoying the benefits of compounding returns over time.
-
Does a Farm Need a Different Homeowners Insurance Policy?Homeowners insurance is all about providing the right tool for the right exposure, and life on the farm comes with different risks than life in the city.
-
Stock Market Today: Stocks Slip After Powell Talks Rate CutsThe main indexes closed lower Thursday after Fed Chair Powell said there's no rush to cut rates.
