TSMC (TSM) announced on Friday that its revenues for July increased by 23.6% from June to NT$256.95 billion, and were up 44.7% year-over-year. For the period from January through July, the chip giant’s revenues rose by 30.5% year-over-year to NT$1,523.11 billion.
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As a key player in AI demand, TSMC supplies chips for Nvidia (NVDA), AMD (AMD), and Apple’s (AAPL) iPhones. The company reported robust results for the second quarter and issued an optimistic outlook for the third quarter, citing strong demand in both the smartphone and AI sectors.
TSM Stock Decline Over the Past Month
TSMC’s shares have plunged by more than 10% over the past month amid a broader market sell-off and some bad news from Nvidia. It was reported that Nvidia’s production of its next-generation AI chip, Blackwell, has been delayed by at least three months due to unexpected design flaws. Nvidia is a major client for TSMC.
Citi Analyst Sees Strong Chip Demand Continuing
Citi analyst Mark Ru Li noted that despite delays in Nvidia’s advanced chips, AI chip demand remains strong and that initial technical issues are temporary. The analyst expects TSMC’s earnings growth to remain solid, driven by strong demand for AI Graphics Processing Units (GPUs).
He reiterated a Buy rating and raised the price target to $150 from $125, implying a potential downside of 8.8% from current levels.
Is TSM a Buy, Sell, or Hold?
Analysts remain bullish about TSM stock, with a Strong Buy consensus rating based on a unanimous 11 Buys. Over the past year, TSM has increased by more than 75%, and the average TSM price target of $184.30 implies an upside potential of 12% from current levels.
