Here Are the Stocks I'm Watching After Taiwan Semi's Decisive Beat

Taiwan Semiconductor TSM, foundry to the elite of the elite when it comes to Big Tech, will not be releasing the firm's third quarter financial results until October 17.

However, much like Costco COST does in the retailing world, Taiwan Semi does in the tech world: They let us know how they are doing on a monthly basis. Taiwan Semi produces high-end chips for some of tech's brightest stars, namely Nvidia NVDA and Advanced Micro Devices AMD, among others on the design/generative AI side, and Apple AAPL on the consumer electronics side. Taiwan Semi also competes directly against Intel's INTC still sort of new, but so far less successful, upstart foundry business.

For the month of September, Taiwan Semi generated revenue of NT$759.69 billion, decisively beating expectations for something close to NT$748 billion, according to Bloomberg News. Note to readers: the home currency for Taiwan Semi is the New Taiwan dollar (NT). Currently, $1 buys about 32.24 New Taiwan dollars.

Adding that number to the monthly results for July and August gets third quarter revenue to NT$251.87 billion, which would be good for year-over-year growth of 39%. This also works out to about $23.6 billion in U.S. dollars. Back in July, when Taiwan Semi reported the firm's second quarter results, the firm issued Q3 guidance of $22.4 billion to $23.2 billion, so this would be a fairly substantial beat of the firm's own outlook. The consensus across Wall Street has been for roughly $23 billion, so still, a very nice beat.

Readers may recall that a month or so ago, analysts at JP Morgan JPM suggested that the numbers they were seeing implied a third quarter beat. Taiwan Semi themselves had said that the firm that if business was good for the third quarter, it would be reflective of increased demand for smartphones and AI-infrastructure building.

Charts...

TSM investors seem to have expected this beat and are taking the news in stride.

These ADRs are currently in danger of putting in a double-top pattern of reversal, even with a strong RSI and a bullish looking daily MACD. This could be good for a short- to medium-term downside trade, but look again, and I see the makings of an ascending triangle pattern which would be bullish in the longer-term. I find this name difficult to trade at times and have no position.

NVDA has broken out from a closing pennant formation to the upside as the firm's three-day AI show will conclude today. Relative strength is solid, and the daily MACD remains bullish. I am currently working off of a $125 pivot and with a $156 target.

AMD appears to be breaking out from a falling wedge pattern, which we know is seen as a pattern of bullish reversal. Readers should be cognizant that, once Nvidia is done with their dog and pony show on Wednesday, that the Lisa Su led firm is holding a one-day AI event on Thursday. At the moment, I am working with a $168 pivot in AMD and a $201 target price.

Apple appears to be further along in the development of what looks to be an ascending triangle pattern with a $233 pivot. Relative strength is just okay, while the daily MACD is less than bullish looking to me. I do not yet have conviction in this one, and I do not currently have a position.

Intel appears to have put in a bottom as the firm has been showered with federal help. I can't help but feel that the firm is not ready to compete effectively with Nvidia on AI, with AMD in PCs or with TSM in the foundry business. I also don't think that Pat Gelsinger is the CEO to lead this firm to any promised land. That said, the firm is talking about separating that foundry as a subsidiary, but a spinoff might create more cash. Selling more Mobileye MBLY would also create cash. I am now long this name for technical reasons. I have no faith in its ability to compete. There is an unfilled gap up to the $30 level. Hopefully all of the federal support can help the stock fill that gap.

At the time of publication, Guilfoyle was long NVDA, AMD and INTC equity.