Finally, this partnership positions TSMC as a key player in Intel’s aggressive node introduction strategy, potentially making TSMC Intel’s second-largest customer for 3nm chips in 2025. The expectation of manufacturing 15,000 wafers per month by the end of 2024 and doubling to 30,000 in 2025 at the 3nm node further solidifies TSMC’s foothold to breed aggressive revenue growth. Following our earlier coverage, TSM has gained nearly 8%, and the positive outlook reaffirms our buy rating, supported by TSMC’s potential for continued outperformance and growth in shareholder value. The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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- This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate.
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Research Report for TSM
The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
- The company also offers customer support and engineering services, as well as manufactures masks.
- The “Big Short” investor revealed a wager against Nvidia and other semiconductor stocks.
- It is also important to note the recent changes to analyst estimates for TSMC.
- There is a huge wave of investment in semiconductor equipment in the U.S. and Europe.
Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s business operations and its ability to generate profits. TSMC’s dominance in cutting-edge semiconductor technology is pivotal to its value growth. The company’s prowess is evident through its consistent introduction of advanced nodes like the N3 and N5 technologies, contributing significantly to wafer revenue. 4 Wall Street equities research analysts have issued “buy,” “hold,” and “sell” ratings for Taiwan Semiconductor Manufacturing in the last year. The consensus among Wall Street equities research analysts is that investors should “buy” TSM shares.
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It allows the user to better focus on the stocks that are the best fit for his or her personal trading style. We’d like to share more about how we work and what drives our day-to-day business. The company employs more than 65,000 people and is committed to the shift to green energy and sustainability. To that end, it became the 1st semiconductor company https://forex-review.net/ to make the RE100 pledge which states it will use 100% renewable energy by the year 2050. Taiwan Semiconductor has been focused on maintaining its leading position right from the start. To that end, the company tends to reinvest large amounts of capital to increase and expand production as well as in the advancement of semiconductor technology.
According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation. Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system. In detail, TSMC’s robust capital expenditure (CapEx) strategy allocates about 70% of the approximate $32 billion CapEx 2023 to advanced process technologies. This strategic focus on cutting-edge processes demonstrates the company’s commitment to maintaining technological leadership in the semiconductor industry. Additionally, ongoing efforts to further enhance N3 technology, including N3P and N3X, underscore the company’s leadership in continuous improvement and innovation in foundry processes.
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Shareholders of record on Tuesday, March 19th will be given a dividend of $0.5415 per share on Thursday, April 11th. This represents a $2.17 dividend on an annualized basis and a dividend yield of 2.18%. This is a positive change from the stock’s previous quarterly dividend of $0.47. https://forexbroker-listing.com/ In terms of earnings estimate revisions for TSMC, the Zacks Consensus Estimate for the current year has remained unchanged over the past month at $4.97. The ABR suggests buying TSMC, but making an investment decision solely on the basis of this information might not be a good idea.
The company was incorporated in 1987 and is headquartered in Hsinchu City, Taiwan. Notably, TSMC has demonstrated robust revenue growth, as evidenced by Q3 revenue reaching $17.3 billion, aligning with the company’s guidance in U.S. dollar terms. Despite facing challenges such as customers’ ongoing inventory adjustments, the substantial ramp-up of the 3-nanometer technology and increased demand for 5-nanometer technologies have driven revenue. As a result, the company’s gross margin also expanded to 54.3%, reflecting higher capacity utilization despite marginal dilution from the N3 ramp.
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In the coming weeks, the stock price may take support at the pivot at $93, with the 52-week moving average serving as a dynamic support level. Due to the geopolitical risk, TSMC remains 10% undervalued compared to the sector. Similarly, considering the valuation on an absolute basis, the stock is 67% undervalued compared to the historical average of a 5-year PE ratio, which stands at 54 against the current PE ratio of nearly 18.
Per-Share Earnings, Actuals and Estimates
I am the founder of Yiazou Capital Research, a stock-market research platform designed to elevate your due diligence process through in-depth analysis of businesses. Investors should also note TSMC’s current valuation metrics, including its Forward P/E ratio of 19.9. This indicates no noticeable deviation in contrast to its industry’s Forward P/E of 19.9. Chipmaker Taiwan Semiconductor (TSM) shared falling revenue in the month of September, asserting the declines were better than expected.
The company’s products include logic, mixed-signal, RF and embedded memory chips. Looking at the future strategic moves, TSMC’s technological roadmap includes developing the 2-nanometer technology, slated for introduction in 2025. This future technology is anticipated to be the most advanced in density and energy efficiency, catering to the increasing demand for energy-efficient computing solutions. The company’s strategic vision for N2 involves adopting nanosheet transistor structures, a technology promising significant performance and power efficiency advancements.