TSM Surging on Promising March Sales and Funding Boost

Shares of semiconductor major, Taiwan Semiconductor (NYSE:TSM), are on the rise today after the company’s reported promising March sales, which surged by 34.3% year-over-year to NT$195.21 billion. Investor sentiment in TSM is also receiving a $6.6 billion boost from a major funding win under the CHIPS Act for the company.

Promising Sales Trend

During the first three months of 2024, TSM’s revenue surged by 16.5% year-over-year to NT$592.64 billion (~$18.5 billion). These impressive quarterly sales gains are attributed to the global AI wave and the resulting demand for advanced chips and servers.

TSM’s Upcoming Q1 Numbers

The surge in sales also raises hopes for a successful 2024 for TSM. The chipmaker is scheduled to report its first-quarter numbers on April 18. Analysts anticipate an EPS of $1.30 on revenue of nearly $18.26 billion for the quarter. In the same period last year, TSM’s EPS of $1.30 had surpassed estimates by $0.09.

Arizona Funding Boost

In addition to the upcoming results, investor sentiment in TSM is also receiving a boost from the company’s plans to establish a third fabrication facility in Phoenix. These plans mark a significant milestone, with TSM’s total investment in Arizona reaching an impressive $65 billion. The company is set to receive nearly $6.6 billion in direct funding for its Arizona plant from the U.S. Department of Commerce under the CHIPS Act. Impressively, TSM’s Phoenix site represents the largest foreign direct investment (FDI) in Arizona’s history. Production at TSM’s first Arizona fab is estimated to commence in the first half of 2025.

Is TSM a Buy, Sell, or a Hold?

The AI boom has propelled TSM shares nearly 41% higher so far this year. Overall, the Street has a Strong Buy consensus rating on the stock, alongside an average TSM price target of $154.14.

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