Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) (TSMC) saw its total sales in August climb 24% year over year to NT$335.77 billion, which places the world’s biggest contract chipmaker solidly ahead of plan with about 70% of expected Q3 sales booked, according to analysts at Wedbush.
They noted that a weaker Taiwan dollar (NT$) is benefiting TSMC sales in local currency, while also pointing out that the company in recent quarters has outperformed expectations in the first two months of the quarter before then reporting results closer to the initial guide.
“Net with strong intra quarter result in the books and solid recent news flow justifying continued high expectations around future AI demand, we see no reason to shift our constructive view on the stock,” the analysts wrote.
They added that with signs AI/data center momentum is continuing/accelerating and suggestions that consumer demand, particularly for personal computers, might not be quite as weak as had been feared, they “wouldn't be shocked” if TSMC delivers upside in the month of September as well.
Wedbush analysts reiterated their “Outperform’ rating on TSMC stock and maintained their target price of $1,300 per share.
“We believe this valuation is supported by TSMC's robust intermediate growth outlook (driven by demand for advanced semiconductor production supporting a number of applications including AI), particularly with any potential short-term risk tied to Section 232 tariffs now having diminished," the analysts stated.
Shares of TSMC added 4.4% on Wednesday morning as Oracle's blockbuster earnings saw AI-related stocks surge.