Taiwan Semiconductor TSM, a current Zacks Rank #1 (Strong Buy), is the world’s leading dedicated semiconductor foundry. It supports a thriving ecosystem of global customers and partners with the industry’s leading process technologies and portfolio of design enablement solutions to unleash innovation for the global semiconductor industry.
The company’s earnings outlook has shifted positively across the board following its latest set of better-than-expected quarterly results.
Image Source: Zacks Investment Research
In addition to favorable earnings estimate revisions, the stock resides in the Zacks Semiconductor – Circuit Foundry industry, currently ranked in the top 1% of all Zacks industries. Let’s take a closer look at how the company currently stacks up.
TSM Revenues Melt Higher
TSM shares have been red-hot in 2024 thanks to strong quarterly results, gaining nearly 85% compared to the S&P 500’s 25% gain. Perhaps to the surprise of some, the performance actually beats out a solid chunk of the Mag 7 group in 2024.
Image Source: Zacks Investment Research
Concerning headline figures in its latest quarterly release, TSM posted an 11.5% beat relative to the Zacks Consensus EPS Estimate and reported sales 3.5% ahead of expectations. EPS grew 50% year-over-year, whereas sales of $23.5 billion jumped an impressive 36%.
The company’s top line performance has been excellent over recent years, with the recent AI frenzy providing a big boost. Below is a chart illustrating the company’s sales on a quarterly basis.
Image Source: Zacks Investment Research
Wendell Huang, CFO, was upbeat about the results and the upcoming period, stating:
“Our business in the third quarter was supported by strong smartphone and AI-related demand for our industry-leading 3nm and 5nm technologies.”
He continued:
“Moving into fourth quarter 2024, we expect our business to continue to be supported by strong demand for our leading-edge process technologies.”
Analysts have revised their sales expectations for the upcoming Q4 print following the release, with the $25.9 billion expected suggesting a 32% jump from the year-ago period. EPS revisions for the period also shot higher, with the now $2.14 Zacks Consensus EPS estimate up nicely from the $1.94 expected in early November.
Image Source: Zacks Investment Research
Bottom Line
Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.
The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.
Taiwan Semiconductor TSM would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
