Taiwan Semiconductor Manufacturing on Thursday beat analyst estimates for the third quarter and guided above views for the current period. TSM stock hit an all-time high on the news but later pulled back.
The world's largest contract chipmaker, better known as TSMC, earned $2.92 per U.S. share on sales of $33.1 billion in the September quarter. Analysts polled by FactSet had expected earnings of $2.63 a share on sales of $32.07 billion. In the year-earlier period, TSMC earned $1.95 a share on sales of $23.62 billion.
In local currency, TSMC earnings increased 39% year over year while sales rose 30.3%.
For the current quarter, TSMC expects revenue of $32.2 billion to $33.4 billion. The midpoint of $32.8 billion topped Wall Street's target of $31.55 billion. In the fourth quarter last year, it posted sales of $26.38 billion.
On the stock market today, TSM stock hit a record high of 311.37 before retreating. It ended the regular session down 1.6% to 299.84.
On Sept. 9, TSM stock broke out of a flat base at a buy point of 248.28, according to IBD MarketSurge charts.
TSM Stock Is On Four IBD Lists
"Our business in the third quarter was supported by strong demand for our leading-edge process technologies," Chief Financial Officer Wendell Huang said in a news release. "Moving into fourth quarter 2025, we expect our business to be supported by continued strong demand for our leading-edge process technologies."
In the third quarter, shipments of 3-nanometer chips accounted for 23% of TSMC's total wafer revenue and 5-nanometer chips accounted for 37%. Advanced technologies, defined as 7-nanometer and smaller nodes, accounted for 74% of total wafer revenue.
TSMC produces chips for AMD, Apple, Broadcom, Nvidia, Qualcomm and other companies.
Lately TSMC has benefited from heightened production of AI data center chips, mostly for Nvidia.
Needham analyst Charles Shi reiterated his buy rating on TSM stock and upped his price target to 360 from 270.
TSMC's strong Q3 results were the result of heightened AI chip production, operational efficiency and capital discipline, he said in a client note Thursday.
TSM stock is on four IBD stock lists: IBD 50, Stock Spotlight, Global Leaders and Tech Leaders.
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