Taiwan Semiconductor Manufacturing Co. (TSM), or TSMC, delivered impressive fourth-quarter results and issued upbeat guidance for Q1. The chipmaker’s earnings surged 57% year-over-year to a record NT$14.45 ($2.24 per American Depository Receipt) in Q4. Meanwhile, revenue climbed 38.8% year-over-year to NT$868.46 billion ($26.9 billion), slightly exceeding the consensus estimate of $26.24 billion.
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The strong performance was fueled by increasing demand for semiconductors used in artificial intelligence (AI) applications.
Looking ahead, TSMC’s management remains optimistic about the future, citing sustained global investment in AI technologies as a key growth driver. The company plans to invest between $38 billion and $42 billion in capital expenditures for 2025, focusing on expanding advanced manufacturing capabilities to meet increasing demand.
Guidance for Q1 2025
TSMC projects Q1 2025 revenue between $25 billion and $25.8 billion, exceeding the consensus estimate of $24.43 billion.
Meanwhile, the company anticipates a gross margin of 57% to 59% and an operating margin of 46.5% to 48.5%.
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 four Buys and one Hold recommendation. The average TSM stock price target of $236.60 implies about 14.4% upside potential from current levels.
