TLDR
- CFRA Research upgraded TSM stock to buy from hold with price target raised to $295
- Stock broke out of flat base pattern at $248.28 buy point in morning trading
- Company reported accelerating growth with earnings rising 47%, 54%, and 79% over three quarters
- Analysts expect Q3 earnings of $2.60 per share, up 34% year-over-year
- Revenue growth accelerated to 30%, 36%, and 54% in recent three quarters
Taiwan Semiconductor Manufacturing stock gained momentum Tuesday following an analyst upgrade that highlighted the company’s strong position in artificial intelligence chip production. CFRA Research analyst Hazim Bahari upgraded the stock to buy from hold.
The analyst also raised his 12-month price target to $295 from $240. This represents the latest vote of confidence in the world’s largest contract chipmaker.
TSM stock broke out of a flat base pattern at a buy point of $248.28 during morning trading. The 5% buy zone extends to $260.69 based on technical analysis guidelines.
The stock was trading up 1.2% to $250.02 in recent action. This breakout comes as the company continues to benefit from strong demand for AI processors.
Taiwan Semiconductor serves as the primary manufacturer for cutting-edge artificial intelligence chips. The company produces processors for major clients including Nvidia, AMD, and Broadcom.
Financial Performance Shows Strong Momentum
The chipmaker has demonstrated accelerating growth across multiple quarters. Sales have increased 30%, 36%, and 54% year-over-year over the past three reporting periods.
Earnings per share growth has been even more impressive. The company posted gains of 47%, 54%, and 79% in the same timeframe.
This consistent acceleration reflects the growing demand for advanced semiconductor manufacturing. The company’s advanced process nodes are essential for producing the most sophisticated AI chips.
For the current quarter, Wall Street analysts expect earnings of $2.60 per share. This would represent a 34% increase compared to the same period last year.
Revenue projections call for $32 billion in quarterly sales. This estimate reflects a 36% year-over-year growth rate.
Analyst Estimates and Market Position
The consensus earnings estimate for the full fiscal year stands at $9.83 per share. This projection indicates a 39.6% change from the prior year period.
Looking ahead, analysts forecast next fiscal year earnings of $10.97 per share. This represents an 11.6% growth rate from current year expectations.
Revenue estimates show similar strength across multiple time periods. The consensus sales estimate of $32.31 billion for the current quarter points to 37.5% year-over-year growth.
Full-year revenue projections reach $122.4 billion with next year estimates at $140.17 billion. These figures indicate growth rates of 35.9% and 14.5% respectively.
The company has maintained a strong track record of beating analyst expectations. TSM exceeded consensus EPS estimates in each of the trailing four quarters.
Revenue performance has been equally consistent. The company topped consensus revenue estimates in all four recent reporting periods.
In the most recent quarter, TSM reported revenues of $30.07 billion. This represented a 44.4% year-over-year increase and beat the consensus estimate of $30.04 billion.
Earnings per share came in at $2.47 compared to $1.48 in the prior year period. The result exceeded analyst expectations by 4.22%.
Current valuation metrics show the stock trading at a premium to industry peers. The company receives a D grade on value-based scoring systems.
Despite the premium valuation, analysts maintain their focus on the company’s growth trajectory. The current Zacks ranking of Hold reflects expectations for market-level performance in the near term.
Over the past month, TSM shares have returned 0.7% compared to broader market gains. The semiconductor foundry industry has gained 4.7% during the same period.
