Taiwan Semi's Jaw-Dropping July Revenue Backs These 5 Portfolio Holdings
Other reports point to ramping iPhone 16 production.
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* TSM’s July revenue soared 24% sequentially and almost 45% year over year.
* TSM’s pronounced July revenue supports recent portfolio moves.
* Other reports point to Apple’s ramping iPhone production and organic light-emitting diode display needs.
* These data points collectively support five of our holdings.
After putting in its best day since 2022 Thursday, the overall market move to digest that rebound on what can only be described as a roller-coaster ride when we look at this week’s charts for the S&P 500 and the Nasdaq Composite. We’ve talked about how volatility like that can bring opportunity, and we seized it this week by calling up Meta Platforms META, Eaton ETN, and Dutch Bros BROS from the Bullpen to the portfolio. We also made several additions to existing holdings, including Marvell MRVL and Universal Display OLED. This morning, we are seeing support for that decision as well as for our holdings in Nvidia NVDA, Apple AAPL, and Qualcomm QCOM.
We’re referring to the jaw-dropping July revenue report out earlier this morning from Taiwan Semiconductor TSM. For the month, TSM’s revenue soared 24% compared to June and climbed almost 45% higher compared to July 2023. Typically, we see a sequential pick-up in July, a signal confirming the ramp of new products, but this year’s 24% month-over-month increase is head and shoulders over the 4%-6% sequential increase we’ve seen in recent years. The size of this year’s increase speaks to the confluence of AI and data center strength and the rebounding smartphone and PC markets.
Helping support that line of thinking, other reports indicate Apple has moved into mass production for its iPhone 16 models which could hit shelves in mid-September. Those reports also point to Samsung Display and LG Display expanding production as Apple is targeting 90 million iPhone 16 models with 120 million organic light-emitting diode panels. The difference between those figures likely reflects Apple’s use of organic light-emitting diodes in its newer iPad Pro models.
While the portfolio has relatively full positions across those five holdings, members who are underweight those names should consider using this morning’s July TSM revenue report as the catalyst to take advantage of recent weakness in the shares of QCOM, NVDA, MRVL, and OLED. Adding support for that call, following the pullback in the tech sector, Truist, which cut tech to a "Neutral" rating in June, has upgraded the sector back to "Overweight."
At the time of publication, TheStreet Pro portfolio was long META, ETN, BROS, AAPL, QCOM, NVDA, MRVL, and OLED.
