Taiwan Semiconductor Manufacturing Co Ltd (NYSE:TSM) shares are down on Friday, despite the company reporting record profits.
Here are some key analyst takeaways:
- Needham analyst Charles Shi reiterated a Buy rating, while raising the price target from $530 to $560.
- DA Davidson analyst Gil Luria reiterated a Buy rating and price target of $500.
Check out other analyst stock ratings.
Needham: Taiwan Semiconductor Manufacturing delivered a strong beat-and-raise quarter, with revenue coming in above the high end of the guidance and gross margins in-line with expectations, Shi said in a note.
While capex (capital expenditure) declined slightly from the previous quarter’s levels, the company maintained its full-year capex guidance, the analyst noted. This indicated that the spend in the fourth quarter is likely to be high, with quarterly capex expected to surpass $21 billion, he added.
“Management sees potential for AI accelerator revenue growth to be above the current guidance of mid- to high-50s CAGR in 2024-2029,” Shi wrote.
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DA Davidson: Taiwan Semiconductor Manufacturing’s total revenue grew 41% year-on-year and 16% sequentially to $46.7 billion, Luria said. This was driven by continued demand for the company’s leading-edge technologies across HPC (high-performance computing), which now represents around 68% of total revenue, he added.
Management guided to total revenue in the range of $52.3 billion to $54.3 billion for the fourth quarter, implying 58% year-on-year at the midpoint, the analyst stated.
While reiterating their full-year capex guidance, management noted that the “newly emerging Agentic AI market and strong structural demand from customers continue to give them confidence to invest,” he further wrote.
TSM Price Action: Shares of Taiwan Semiconductor Manufacturing had declined by 1.62% to $415.39 at the time of publication on Friday.
