Taiwan Semiconductor Manufacturing on Thursday said it finished the third quarter on a positive note, with sales in September coming in well above estimates. But TSM stock slid after the report.
The contract chipmaker, better known as TSMC, generated revenue of 331 billion New Taiwan dollars, or $10.9 billion, in September. Analysts polled by FactSet had expected sales of about 302 billion New Taiwan dollars in September.
In local currency, TSMC sales rose 31.4% year over year in September. But revenue slipped 1.4% from August.
TSM stock fell 1.5% to close at 299.88 on the stock market today. On Wednesday, Taiwan Semiconductor's U.S. shares gained 3.6% to 304.52, just below Monday's record high of 307.30.
TSMC is due to report its third-quarter results on Oct. 16. Analysts expect the chip foundry to earn $2.62 a share on sales of $32.07 billion. That would translate to year-over-year growth of 34% in earnings and 36% in sales.
Taiwan Semiconductor makes chips for a who's who of fabless chipmakers and tech giants including Nvidia, AMD, Apple and Broadcom. This year, it has seen robust business producing cutting-edge processors for artificial intelligence applications, mainly for Nvidia.
TSM Stock Is On Three IBD Lists
"TSMC appears to be firing on all cylinders," Wedbush Securities analyst Matt Bryson said in a client note. He raised his sales and earnings estimates for TSMC based on continued AI chip growth and expected price increases, as well as rebounding PC sales.
Bryson rates TSM stock as outperform, or buy.
TSM stock is on three IBD lists: IBD 50, Global Leaders and Tech Leaders. It has a best-possible IBD Composite Rating of 99, according to IBD Stock Checkup.
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