Taiwan Semiconductor Manufacturing Co. Ltd (TSM) delivered a knockout quarter on Thursday, beating analyst expectations across the board and giving Wall Street plenty to get excited about.
The chipmaking giant posted fourth-quarter net sales of $33.73 billion (1.05 trillion New Taiwanese dollars), marking a 20.5% jump year-over-year and topping the analyst consensus of $33.27 billion. Quarter-over-quarter, revenue climbed 5.7%.
Net income came in at $16.31 billion (505.74 billion New Taiwanese dollars), while earnings per share reached $3.14, representing a 35.0% year-over-year increase and handily beating the $2.79 consensus estimate.
What's driving the numbers? AI, and lots of it. CEO C.C. Wei said the company has been directly validating AI demand with hyperscalers and their end customers, and he's convinced this isn't some fleeting trend. Instead, Wei characterized AI as a multi-year structural growth driver rather than a short-term cycle.
"All in all, I believe in my point of view, the AI is real. Not only real, it is starting to grow into our daily life. We believe that is kind of. We call it AI Megatrend," Wei said.
Taiwan Semiconductor shares climbed 0.8% to $344.26 on Friday as investors digested the strong results.
Analysts wasted no time adjusting their outlook following the earnings announcement:
- TD Cowen analyst Krish Sankar maintained Taiwan Semiconductor with a Hold rating but raised the price target from $325 to $370.
- Barclays analyst Simon Coles maintained his Overweight rating and boosted the price target from $380 to $450.
The message from analysts is clear: the AI boom is real, and Taiwan Semiconductor is sitting right at the center of it.
