TSMC Plans $56 Billion Capex to Meet Surging AI Demand
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Fool
- Significant Revenue Growth: TSMC's Q4 revenue reached $33.7 billion, a 26% year-over-year increase, indicating strong demand for AI chips and driving earnings per ADR up 35% to $3.14, reflecting the company's market leadership in high-performance computing.
- Margin Expansion: TSMC's gross profit margin increased to 62.3% from 59% last year, while operating margin rose to 54% from 49%, demonstrating the company's ability to enhance profitability while meeting AI demand, thereby strengthening its competitive position.
- Substantial Capex Increase: TSMC plans to raise capital expenditures to between $52 billion and $56 billion, exceeding Wall Street's expectations of $41 billion, showcasing management's confidence in sustained AI market growth and further expanding production capacity to meet demand.
- Wider Industry Impact: The increase in TSMC's production capacity will help alleviate chip shortages for companies like Nvidia and Broadcom, expected to drive growth across the AI sector and further solidify TSMC's core position in the semiconductor industry.
Analyst Views on AVGO
Wall Street analysts forecast AVGO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AVGO is 398.73 USD with a low forecast of 300.00 USD and a high forecast of 480.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
30 Analyst Rating
28 Buy
2 Hold
0 Sell
Strong Buy
Current: 339.890
Low
300.00
Averages
398.73
High
480.00
Current: 339.890
Low
300.00
Averages
398.73
High
480.00
About AVGO
Broadcom Inc. is a global technology firm that designs, develops, and supplies a range of semiconductors, enterprise software and security solutions. The Company operates through two segments: semiconductor solutions and infrastructure software. Its semiconductor solutions segment includes all of its product lines and intellectual property (IP) licensing. It provides a variety of radio frequency semiconductor devices, wireless connectivity solutions, custom touch controllers, and inductive charging solutions for mobile applications. Its infrastructure software segment includes its private and hybrid cloud, application development and delivery, software-defined edge, application networking and security, mainframe, distributed and cybersecurity solutions, and its FC SAN business. It provides a portfolio of software solutions that enable customers to plan, develop, automate, manage and secure applications across mainframe, distributed, mobile and cloud platforms.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
