Taiwan Semiconductor Manufacturing, better known as TSMC, on Thursday beat earnings estimates for the second quarter. It also guided above views for the current period. TSMC stock rose on the news.
TSMC, the world's largest contract chip manufacturer, earned $2.47 per U.S. share on sales of $30.07 billion in the June quarter. Analysts polled by FactSet had expected earnings of $2.38 a share on sales of $30.21 billion. In the year-earlier period, the chipmaker earned $1.47 a share on sales of $20.66 billion.
In local currency, TSMC earnings increased 60.7% year over year while sales rose 38.6%.
For the current quarter, TSMC expects revenue of $31.8 billion to $33 billion. The midpoint of $32.4 billion topped Wall Street's target of $30.7 billion. In the third quarter last year, it posted sales of $23.62 billion.
"Our business in the second quarter was supported by continued robust AI and HPC-related demand," Chief Financial Officer Wendell Huang said in a news release. TSMC is a top maker of chips for artificial intelligence and high-performance computing.
"Moving into third quarter 2025, we expect our business to be supported by strong demand for our leading-edge process technologies," he said.
In the second quarter, shipments of 3-nanometer chips accounted for 24% of TSMC's total wafer revenue and 5-nanometer chips accounted for 36%. Advanced technologies, defined as 7-nanometer and smaller nodes, accounted for 74% of total wafer revenue.
TSMC Stock Is a Recent Breakout
TSMC also raised its full-year revenue growth outlook to about 30% from the previous 24% to 26%.
"TSMC delivered a strong beat-and-raise quarter, with the Q3 revenue outlook vastly exceeding consensus estimates and implied EPS guidance well ahead of the Street, despite the gross-margin headwinds due to FX and overseas fab production ramp," Needham analyst Charles Shi said in a client note. He rates TSMC stock as buy with a price target of 270.
On the stock market today, TSMC stock rose 3.4% to close at 245.60. Earlier in the day, it notched a regular-session record high of 248.27.
On May 22, TSMC stock broke out of a cup-with-handle base at a buy point of 196.22, according to IBD MarketSurge charts. It is now trading in the 20%-to-25% profit-taking zone of its breakout, according to IBD trading guidelines.
TSMC produces chips for AMD, Apple, Broadcom, Qualcomm, Nvidia and other companies.
TSMC stock is on at least two IBD lists: IBD 50 and Tech Leaders.
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