What's Going On With Taiwan Semiconductor Stock On Wednesday?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 30 2024
0mins
Should l Buy TSM?
Source: Benzinga
TSMC Halts Shipments: Taiwan Semiconductor Manufacturing Company has stopped chip shipments to two developers due to concerns over potential links to Huawei, amid suspicions of U.S. export sanction violations by Bitmain, a major bitcoin mining hardware manufacturer.
Geopolitical Tensions Impacting TSMC: Increasing geopolitical tensions and criticism from Republican presidential candidate Donald Trump regarding Taiwan's role in the U.S. chip industry have negatively affected TSMC's stock performance, despite its significant revenue from the Chinese market.
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Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 353.130
Low
63.24
Averages
313.46
High
390.00
Current: 353.130
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
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.
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- Sales Outlook: In its quarterly report, Nvidia stated that its first-quarter forecast does not include H200 sales, and it has not sold any H200 systems recently, highlighting the uncertainty surrounding its sales prospects in the Chinese market, which could affect future revenue growth.
- Market Reaction: Following this news, Nvidia's shares fell 0.2% in early premarket trading on Thursday, as investor concerns about the company's persistent exposure to the Chinese market intensified, further pressuring its stock price.
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- Job Creation: The new fab is expected to generate 1,400 direct jobs and 500 supply-chain roles, further solidifying TSMC's leadership in semiconductor manufacturing while injecting vitality into the local economy.
- Strong Market Performance: Driven by AI hardware demand, Taiwan's January exports surged 70%, the fastest pace in 16 years, while TSMC reported a 37% revenue increase for the same period, indicating robust market demand and economic momentum.
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- Strong Earnings Guidance: The company achieved a 29% increase in total sales to $19.3 billion in Q1, surpassing analyst expectations, with CEO Hock Tan projecting AI semiconductor revenue of $10.2 billion for the current quarter, further solidifying its market leadership.
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- Industry Impact: As the leader in AI chips, Nvidia's performance not only benefits itself but also drives demand for cloud service providers and other related products, creating a positive feedback loop that promotes growth across the entire AI industry chain.
- Investment Opportunity: With Nvidia's stock price currently down, investors have a solid entry point, especially given the strong earnings momentum, which has attracted increased attention from investors towards its stock and related ETFs.
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Nvidia Adjusts H200 Chip Production Plans Amid Regulatory Challenges
- Production Shift: Nvidia has requested TSMC to redirect capacity originally allocated for H200 chips to its next-generation Vera Rubin hardware, indicating a significant downgrade in expectations for H200 sales in China, reflecting ongoing regulatory challenges impacting its business.
- Sales Outlook: In its quarterly report, Nvidia stated that its first-quarter forecast does not include H200 sales, and it has not sold any H200 systems recently, highlighting the uncertainty surrounding its sales prospects in the Chinese market, which could affect future revenue growth.
- Market Reaction: Following this news, Nvidia's shares fell 0.2% in early premarket trading on Thursday, as investor concerns about the company's persistent exposure to the Chinese market intensified, further pressuring its stock price.
- Retail Sentiment Shift: Although retail sentiment towards Nvidia has improved compared to the beginning of the year, it remains less bullish than the previous day, with discussion volumes on Stocktwits down over 82% in the past week, indicating a cautious outlook on Nvidia's future performance.
See More
TSMC Expands Production to Meet AI Hardware Demand
- Capacity Expansion Plan: TSMC's new 15.46-hectare facility in the Southern Taiwan Science Park has passed environmental impact assessment, with completion targeted for 2028, focusing on industrial efficiency with 8 hectares dedicated to production equipment to enhance overall capacity to meet global AI hardware demand.
- Job Creation: The new fab is expected to generate 1,400 direct jobs and 500 supply-chain roles, further solidifying TSMC's leadership in semiconductor manufacturing while injecting vitality into the local economy.
- Strong Market Performance: Driven by AI hardware demand, Taiwan's January exports surged 70%, the fastest pace in 16 years, while TSMC reported a 37% revenue increase for the same period, indicating robust market demand and economic momentum.
- GDP Growth Forecast Upgraded: The Taiwanese government has revised its annual GDP growth forecast upward to 8.68% due to strong export performance and TSMC's impressive results, reflecting the positive impact of the semiconductor industry on the economy.
See More
Investment Opportunities in TSMC and Micron for AI Growth
- TSMC's Market Leadership: Taiwan Semiconductor holds approximately 70% market share in advanced chip manufacturing, with Q4 2022 sales rising 26% to $33.7 billion and earnings up 35% to $3.14 per share, indicating strong growth potential in AI processor production.
- Future Growth Expectations: TSMC's management anticipates a 30% revenue growth for the full year 2026, reflecting its strategic investments in new manufacturing processes and suggesting the company will maintain its competitive edge in the AI boom.
- Micron's Memory Demand: Micron Technology's Q1 sales surged 57% to $13.6 billion, driven by a sharp increase in demand for memory processors, with diluted earnings per share soaring 175% to $4.60, highlighting the robust need for memory and storage in data center construction.
- Large-Scale Investment Plans: Micron plans to invest over $200 billion in new factories over the next few years, including two high-volume plants in Idaho, to meet the surging market demand, while its stock trades at a P/E ratio of 39, presenting a solid investment opportunity.
See More
Amazon Trade Dynamics and Investment Adjustments
- Amazon Share Trade: Amazon traded 66,934 shares valued at approximately $14.5 million, reflecting a cautious investor sentiment amid strategic adjustments in the e-commerce sector.
- Earnings Beat: Amazon reported fourth-quarter revenue of $213.39 billion, exceeding estimates, while planning to increase capital expenditures to $200 billion, indicating strong confidence in future growth.
- Joby Aviation Investment: Ark Invest acquired 200,856 shares of Joby Aviation valued at around $2 million, with Joby's fourth-quarter earnings showing an EPS of -$0.14, beating estimates by 30%, highlighting improved financial health.
- Nextdoor Holdings Divestment: Ark Invest sold 1,405,207 shares of Nextdoor Holdings for about $2.3 million, following the company's earnings report that showed a 7% year-over-year revenue increase and a narrowed net loss of $4 million.
See More
Broadcom Projects AI Chip Revenue Exceeding $100 Billion Next Year
- Surge in AI Revenue: Broadcom reported a more than 100% year-over-year increase in AI revenue for Q1, reaching $8.4 billion, demonstrating the company's robust performance amid the AI boom, which is expected to drive sustained future growth.
- Strong Earnings Guidance: The company achieved a 29% increase in total sales to $19.3 billion in Q1, surpassing analyst expectations, with CEO Hock Tan projecting AI semiconductor revenue of $10.2 billion for the current quarter, further solidifying its market leadership.
- Rising Customer Demand: As large customers increasingly require custom silicon, Broadcom has secured the supply chain necessary to meet its 2027 sales targets, indicating strategic readiness to fulfill market demands.
- Key Customer Collaborations: Broadcom is assisting six major clients, including Google, Meta, Anthropic, and OpenAI, in chip design, which is expected to accelerate the next phase of custom AI deployment and further drive company growth.
See More
Nvidia Continues to Exceed Earnings Expectations, Boosting AI Sector
- Earnings Beat: Nvidia's latest earnings report revealed record revenue for both the quarter and the year, with sustained high demand allowing the company to maintain a gross margin in the mid-70% range, reinforcing its strong leadership position in the AI chip market and enhancing its influence in the tech sector.
- Industry Impact: As the leader in AI chips, Nvidia's performance not only benefits itself but also drives demand for cloud service providers and other related products, creating a positive feedback loop that promotes growth across the entire AI industry chain.
- Investment Opportunity: With Nvidia's stock price currently down, investors have a solid entry point, especially given the strong earnings momentum, which has attracted increased attention from investors towards its stock and related ETFs.
- ETF Investment Strategy: The Dan Ives Wedbush AI Revolution ETF emerges as an ideal choice for investing in Nvidia and its partners, as it holds significant positions in companies closely linked to Nvidia, such as Taiwan Semiconductor and Amazon, thereby enhancing portfolio diversification and potential returns.
See More
