TSMC’s stocks soar on broker optimism ahead of earnings release

Taiwan Semiconductor Manufacturing Company (TSMC) hit a new high in Taipei trading on Monday, driven by positive analyst forecasts before its earnings report.

The stock jumped as much as 4.5 per cent, extending its year-to-date rally to over 75 per cent. This surge comes after Morgan Stanley joined a growing list of brokers raising their price targets on TSMC.

The brokerage firm expects a nine per cent increase in the chipmaker’s target price, anticipating TSMC to raise its full-year sales forecast during its upcoming earnings announcement. Morgan Stanley also predicts TSMC will increase wafer prices due to its strong market position.

Morgan Stanley analysts, led by Charlie Chan, observed that TSMC’s ‘hunger marketing’ approach seems successful. Recent supply chain checks show TSMC warning of limited supply in 2025, hinting that customers may need to acknowledge TSMC’s worth to secure enough capacity.

JPMorgan analysts, led by Gokul Hariharan, also anticipate a revenue guidance increase during the upcoming earnings call. “We expect TSMC to sound more constructive on AI accelerator demand,” Hariharan wrote in a Sunday report.

Morgan Stanley, JPMorgan, Nomura Holdings, and Mizuho Securities are optimistic about TSMC’s upcoming second-quarter results.

The company, known for producing advanced chips for Apple and Nvidia, is projected to show a 36 per cent revenue increase compared to last year. This would mark its fastest growth rate since the Q4 of 2022, according to Bloomberg data.

This earnings optimism propelled TSMC’s shares past NT$1,000 (about $31) last week. Based on its American depositary receipts, the company’s market value briefly surpassed Berkshire Hathaway to become the eighth-largest globally. Currently, TSMC boasts a market capitalisation exceeding $950 billion.

Attribution: Bloomberg