Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) delivered a robust financial report for the fourth quarter, posting results that significantly exceeded market projections. The semiconductor giant recorded net sales reaching $33.73 billion (1.05 trillion New Taiwanese dollars), marking an impressive 20.5% increase over the same period last year and slightly outpacing the consensus estimate of $33.27 billion. Sequential growth was also notable with a 5.7% rise compared to the previous quarter.
Earnings for the period reflected an even stronger performance. TSMC reported net income totaling $16.31 billion (505.74 billion New Taiwanese dollars), alongside earnings per share (EPS) of $3.14. These figures represented a 35% surge year-over-year and surpassed analyst expectations that forecasted EPS at $2.79.
Chief Executive Officer C.C. Wei emphasized the strategic validation of artificial intelligence (AI) demand directly from major hyperscalers and their customers. He underscored AI's role not merely as a fleeting cycle but a sustained growth driver embedded in TSMC’s long-term strategy, referring to it as an "AI Megatrend" impacting everyday life and broadening market opportunities.
Following the earnings announcement, the market responded positively, with TSMC shares rising by 0.8% to $344.26 in early Friday trading.
Notable analyst firms have adjusted their price targets upward post-earnings while maintaining their respective stock ratings. Krish Sankar of TD Cowen retained a Hold rating for TSMC and raised the price target from $325 to $370, reflecting cautious optimism boosted by the company’s earnings strength.
Meanwhile, Simon Coles at Barclays upheld an Overweight rating and increased the valuation target from $380 to $450, signaling greater confidence in the stock’s upside potential supported by solid quarterly performance and positive strategic drivers.
Investors considering a position in TSMC are encouraged to review latest analyst perspectives, reflecting on momentum, growth, and quality metrics that Benzinga’s proprietary rankings capture, illustrating the stock’s current market positioning.
Key Points:
- TSMC’s Q4 net sales grew 20.5% year-over-year to $33.73 billion, slightly above analyst expectations.
- The company reported a 35% increase in net income year-over-year, with EPS rising to $3.14, beating forecasts.
- CEO C.C. Wei affirmed AI as a long-term structural growth catalyst rather than a short-term cycle.
- Analysts from TD Cowen and Barclays raised price targets while maintaining Hold and Overweight ratings, respectively.
Risks and Uncertainties:
- While AI demand is validated by hyperscalers, technology cycles in semiconductor markets remain subject to fluctuations and potential volatility.
- Stock price adjustments by analysts indicate some caution despite upward revisions, suggesting market sensitivity to execution and macroeconomic factors.