The Zhitong Finance App learned that TSM.US's third-quarter revenue performance exceeded market expectations, further highlighting the strong growth in demand for artificial intelligence (AI) chips. The US investment bank Wedbush Securities (Wedbush Securities) believes that TSMC's latest revenue data sends a positive signal to the fourth quarter results outlook, and continues to regard it as a high-quality investment target for laying out the long-term growth trend of AI.
As the world's largest foundry company, TSMC reported a record third-quarter revenue of NT$1.49 trillion (US$46.71 billion), up 50% year over year, higher than the London Stock Exchange Group (LSEG) SmartTest forecast of NT$1.46 trillion, and also surpassing the company's previous revenue guidance range of US$44.6 billion to US$45.8 billion.
Wade Bush analyst Matt Bryson pointed out in the report that although TSMC has been able to slightly surpass its own performance guidelines during the AI boom, this time it has exceeded expectations slightly higher than usual. For example, last quarter's revenue exceeded expectations by only about 1%.
Bryson said that since the exchange rate of the US dollar to the NTD in the third quarter was basically in line with the 32.0 level adopted by the company's previous guidelines, the impact of exchange rate factors on performance was relatively neutral, so revenue exceeding expectations mainly reflected the strong performance of the business itself.
In this context, the bank expects TSMC's gross margin for the third quarter to reach at least the median value of the previous 65% to 67% guidance range, or 66%, and is expected to exceed the agency's own forecast of 66%. In contrast, the market generally expected 66.5%.
Bryson believes that as revenue exceeds expectations, TSMC's capacity utilization rate may further improve, thereby supporting gross margin. Actual profitability may also be better than previously anticipated, given the company's historical tendency to provide relatively conservative performance guidance.
The bank continues to be optimistic about TSMC's long-term investment value. Bryson pointed out that TSMC has an almost monopoly market position in the world's most advanced chip manufacturing, and currently the main AI technology development routes are highly dependent on its advanced process production capacity. This allows TSMC to continue to benefit from growing demand for AI chips. He said, “Given TSMC's near-monopoly position in the field of cutting-edge chip manufacturing and the current reliance on TSMC for all major AI development routes, we still believe this stock is one of the best and most stable ways to invest in the future AI-dominated era.”
Bryson maintained TSMC's “outperforming market” rating and gave it a target price of NT$3,000 for Taiwanese stocks.
TSMC plans to announce full financial results for the third quarter and release the latest performance guidelines on October 15. At that time, investors will focus on the company's gross margin performance, advanced process capacity utilization, and management's latest judgment on AI chip demand and revenue growth in the fourth quarter.