TSMC (NYSE:TSM) is poised to unveil its Q3 results on October 17, and the financial world is buzzing with anticipation. Analysts are projecting a staggering 40% surge in profits for the AI chip manufacturer, attributing this growth to the soaring demand for artificial intelligence (AI) chips.
Financial Projections for TSMC’s Q3 Performance
Based on a Reuters report referencing SmartEstimate compiled by LSEG, TSMC’s net profit is estimated to reach T$298.2 billion ($9.27 billion) at the close of the third quarter. Should TSMC align with these projections, its quarterly profit will substantially surpass the T$211 billion reported in the same period last year.
September witnessed TSMC’s revenue soaring to T$251.87 billion, marking a remarkable 39% year-over-year growth.
Analyst Optimism Surrounding TSMC’s Q3 Earnings
Analysts’ buoyant outlook for TSMC’s Q3 results stems from the company’s pivotal role as a key supplier to tech behemoths heavily investing in AI technology. As per the Reuters report, Li Fang-kuo, Chairman of President Capital Management, noted, “Most of TSMC’s major clients, including Apple (AAPL), Nvidia (NVDA), AMD (AMD), Qualcomm (QCOM), and Mediatek, are rolling out new products hinging significantly on TSMC’s advanced process technologies.”
Furthermore, TSMC is embarking on substantial investments to expand its manufacturing footprint globally. The corporation is in the process of constructing three new factories in Arizona, with the endeavor expected to cost around $65 billion. TSMC is also eyeing an expansion into Europe.
During its Q2 earnings announcement, TSMC revised its capex forecast for FY24 to fall between $30 billion and $32 billion, compared to its earlier range of $28 billion to $32 billion.
Investor Sentiment: Buy, Sell, or Hold?
Analysts continue to be bullish on TSMC stock, with a consensus rating of Strong Buy based on five unanimous Buy recommendations. Over the past year, TSMC has witnessed a surge of over 100%, with an average price target of $205, implying a 7.4% upside potential from current levels.
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