TSMC Stock Jumps After Earnings Beat and Strong Q4 Guidance

Insights - On October 17, TSMC (TSM) released its financial results for the third quarter of 2024.

The company reported Q3 revenue of NT$759.69 billion, surpassing the market expectation of NT$751.06 billion. Net profit reached NT$325.26 billion, exceeding the forecast of NT$299.3 billion.

In USD terms, revenue was $23.5 billion, a 36% year-over-year increase, surpassing the upper end of the company’s previous guidance of $23.2 billion.

Gross margin stood at 57.8%, exceeding the upper guidance of 55.5%, while net margin was 47.5%, also above the 44.5% upper guidance.

Source: Company Website

In terms of process technology, advanced technologies (including 7nm and more advanced nodes) accounted for 69% of total wafer revenue, up from 67% in the previous quarter.

Notably, the 3nm process, a key growth driver, contributed 20% to wafer revenue, up 5% from the previous quarter.

Source: Company Website

For Q4, TSMC expects revenue of $26.1 billion to $26.9 billion, surpassing the market estimate of $24.94 billion. The gross margin for Q4 is projected at 57% to 59%, exceeding the forecast of 54.7%.

TSMC’s 2024 capital expenditures will slightly exceed $30 billion (previously estimated at $30-32 billion). In USD terms, the company expects full-year sales to grow nearly 30%.

TSMC highlighted that AI demand remains robust, with AI server revenue contributing more than triple compared to last year.

Following the earnings report, TSMC’s U.S. stock (TSM) surged 5% in after-hours trading, reaching $198 per share.

TSMC’s stock is on track to hit a new all-time high, with a market capitalization surpassing $1 trillion. Year-to-date, the stock has gained 85%.