TSM’s Quarterly Sales Bonanza Boosts Outlook for Several Portfolio Stocks
Sales for quarter hit nearly $23.6 billion and signal potential good times for Nvidia, Marvell, Oled, Apple and More.
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September sales from Taiwan Semiconductor landed this morning, and, boy, was the report a doozy.
Sales for the month rose just shy of 40% year over year, bringing the company’s September-ending quarter sales up a staggering 39% year over year and up just over 6% compared to the previous quarter. Based on the strong July and August revenue prints, the market expected TSM to deliver quarterly revenue of around $23.2 billion or NT$748 billion, but with the robust September figure, sales for the quarter closed in at nearly $23.6 billion, or NT$759.69 billion.
TSM does not offer any end market color in these monthly revenue reports. But with recent comments from Nvidia NVDA CEO Jensen Huang pointing to AI chip demand being “insane” and comments from Hon Hai Chairman Young Liu that demand is “crazy,” we can deduce TSM’s High-Performance Computing (HPC) segment revenue was robust. (That HPC segment contains TSM’s AI and data center chip revenue.)
All this tells us the current quarter is shaping up very nicely not only for Nvidia but Marvell MRVL as well.
The next potential catalyst for NVDA and MRVL shares will be Advanced Micro Devices AMD “Advancing AI” event. We’ll be looking for comments from CEO Lisa Su that back the color comments from Nvidia’s Jensen and Hon Hai’s Liu. If Su’s comments don’t match that degree of enthusiasm, it could solidify the view that Nvidia is that much further ahead than AMD.
When TSM reports its quarterly results next week, we’ll get more color on its end market breakdown, including how strong HPC was over the three months compared to year-ago levels. That may give us reason to revisit our NVDA price target, which currently sits at $155.
TSM’s quarterly deep-dive will also give us color on the smartphone market, which is TSM’s second largest behind HPC. That, along with its conference call comments about the smartphone and PC markets, will be the next known catalyst for our shares of Qualcomm QCOM, Universal Display OLED, and Apple AAPL.
With this report in hand, we reiterate our One ratings on NVDA, MRVL, QCOM, and OLED shares. We continue to think the phased rollout of Apple Intelligence will lead to an extended iPhone upgrade cycle, keeping us bullish on AAPL shares over the medium to longer term.
The Pro Portfolio is long AAPL, OLED, AMD, QCOM, MRVL and NVDA.
