TSMC Stock Soars to $110 in 2025 on Strong AI Growth and Apple Partnership

Highlights

• TSMC, Apple's key chip supplier, projects impressive revenue growth in 2024 fueled by the booming artificial intelligence sector.
• Industry experts from Wedbush and Jefferies emphasize TSMC’s pivotal role in AI technology and its strengthened ties with Apple as key growth drivers.
• TSMC’s American depositary receipts (ADRs) jumped over 7% intraday, reflecting investor confidence following strong quarterly results.

Shares of Taiwan Semiconductor Manufacturing Company (TSMC) surged more than 7% during intraday trading on Thursday after the semiconductor giant unveiled an optimistic forecast for 2024, highlighting expected gains from the expanding artificial intelligence (AI) market.

As the world’s leading semiconductor foundry by revenue, TSMC manufactures chips for top tech companies including Apple, Nvidia, and Qualcomm, supplying critical components for their cutting-edge products.

In its fiscal Q4 2023 report, TSMC posted earnings per share (EPS) of $1.44 on $19.62 billion in revenue, slightly below last year’s figures but aligned with analyst expectations and exceeding the company’s earlier guidance of $18.8 billion to $19.6 billion.

“Our Q4 performance was driven by the strong ramp-up of our industry-leading 3-nanometer technology,” stated Wendell Huang, TSMC’s Vice President and Chief Financial Officer.

Looking ahead, TSMC forecasts first-quarter 2024 revenue between $18 billion and $18.8 billion, marking an increase of over $1.25 billion compared to Q1 2023. For the full year, the company anticipates revenue growth in the low to mid-20% range, supported by an improving semiconductor market.

Mark Liu, TSMC’s Executive Chairman, highlighted Taiwan’s emerging leadership in artificial intelligence, noting, “AI is still in its early stages, and today’s innovations represent just the tip of the iceberg.”

TSMC plans a capital expenditure budget of $28 billion to $32 billion for 2024, primarily focused on advancing process technologies. Historically, increased capital investments at TSMC have correlated with higher growth in subsequent years.

Wedbush analysts interpret the bullish outlook as a combination of optimism about AI’s expanding role, improved traditional market trends, and TSMC’s potential market share gains.

Jefferies analysts also praised TSMC’s outlook, citing stronger-than-expected growth driven by Apple’s adoption of TSMC’s N3 process across all iPhone models and emphasizing AI as the company’s fastest-growing segment.

Following the announcement, TSMC’s ADRs climbed 7.3% to $110.41 as of 12:25 p.m. ET on Thursday, contributing to a 23% gain over the past year.

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