Taiwan Semiconductor Manufacturing Co. (TSM), or TSMC, the world’s largest chip manufacturer, is scheduled to announce its fourth-quarter results on Thursday, January 16. According to the company’s December revenue update, the company generated solid top-line growth in Q4 2024, reflecting robust demand due to the ongoing artificial intelligence (AI) boom. Analysts expect TSMC’s Q4 earnings per share (EPS) to increase by about 51% year-over-year to $2.20.
Stay Ahead of the Market:
- Discover outperforming stocks and invest smarter with Top Smart Score Stocks
- Filter, analyze, and streamline your search for investment opportunities using Tipranks' Stock Screener
Based on the December update, TSMC’s Q4 revenue reached 868.5 billion New Taiwan dollars ($26.3 billion), reflecting nearly 39% year-over-year growth. Investors keenly await TSMC’s results, given that it is a key supplier to American tech giants like Nvidia (NVDA) and Apple (AAPL).
Sentiment Ahead of TSMC’s Q4 Results
Following the December revenue update, Bernstein analyst Mark Li reiterated a Buy rating on TSM stock with a price target of $258 (NT$1,380), calling it a Top Pick for 2025. The analyst expects strength in AI, CPU, and mobile businesses to support the 2025 growth outlook. However, Li cautioned that investors should be aware of the margin pressure from the depreciation of the company’s new U.S. fabrication plant.
Li believes that strong AI demand is fueling rapid capacity expansion at TSMC. Moreover, he thinks that the company’s leading technology, cost, and execution make it less sensitive to AI sustainability concerns. He added that multiple growth drivers could offset the slow recovery and rivalry in older nodes and help TSMC generate about 30% EPS growth in 2025 and another 24% in 2026. He expects strong Q1 2025 revenue guidance but a conservative margin outlook.
Likewise, Bank of America Securities analyst Brad Lin reaffirmed a Buy rating on TSM stock with a price target of $250. The analyst’s optimism is backed by multiple factors that suggest strong growth potential for the company. Lin expects TSMC’s revenue growth in 2025 to exceed 30% year-over-year, driven by impressive demand in AI and high-performance computing sectors. He also expects the top line to gain from higher average selling prices for leading-edge technologies and advancements in packaging.
Option Trades Expects a Notable Move in TSM Stock
Using TipRanks’ Options tool, we can see what options traders expect from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders expect a 6.5% move in either direction in reaction to Q4 results.
Is TSM a Good Stock to Buy Now?
Overall, Wall Street is highly bullish on Taiwan Semiconductor Manufacturing Co. stock, with a Strong Buy consensus rating based on six Buys and one Hold recommendation. The average TSM stock price target of $237.17 implies about 18% upside potential from current levels. Shares have rallied 99% over the past year.
