’Reddit is built for this moment’ - Stock soars on crushed earnings
On Sunday, JPMorgan adjusted its outlook on TSMC (2330:TT) (NYSE:TSM) shares, reducing the price target from TWD1,500.00 to TWD1,300.00, while still maintaining an Overweight rating on the stock. Currently trading at $157.08, TSMC appears slightly undervalued according to InvestingPro models. The revision comes amidst expectations of a more cautious revenue forecast from the semiconductor company for the fiscal year 2025, despite its impressive 33.9% revenue growth over the last twelve months.
TSMC is anticipated to guide a quarterly growth of 5-8% for the second quarter of 2025, driven by robust demand for its N4/N5 and N3 technologies, a surge in orders for older nodes preceding the expiration of a 90-day tariff suspension, and continued advancement in packaging technologies. With the company’s next earnings report due on April 17, InvestingPro data shows strong fundamentals, including an excellent financial health score and a solid 56.1% gross profit margin. Despite these positive indicators, JPMorgan anticipates TSMC to lower its full-year 2025 revenue outlook to a low to mid-20% range from the previously projected mid-20% range. This adjustment is in response to the potential impact of tariffs and a global economic slowdown on end demand.
Over the past two months, several factors have been pressuring TSMC’s stock performance. Concerns have included a rumored joint venture with Intel (NASDAQ:INTC), potential margin pressure due to increased investment in U.S. operations, a deceleration in datacenter AI demand, and the broader implications of tariffs on end demand. Analysts believe that TSMC will maintain its long-term growth forecast for datacenter AI, projecting a mid-40% compound annual growth rate (CAGR) leading up to 2029, while also minimizing the incremental margin impact from heightened U.S. investments.
Additionally, TSMC is expected to refrain from commenting on the potential Intel joint venture due to the various possible outcomes that could continue to affect the stock. However, the company is likely to incorporate some moderation in growth projections due to the tariffs and economic slowdown, while still upholding a long-term 20% CAGR into 2029. Analyst consensus remains highly bullish, with InvestingPro showing a strong buy recommendation of 1.33 (where 1 is the strongest buy). For deeper insights into TSMC’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Taiwan Semiconductor Manufacturing Company (TSMC) reported its first-quarter revenue for 2025, surpassing consensus estimates and nearing the high end of its guidance range. The company’s March revenue reached NT$286 billion, a 10% increase month-over-month and a 46% rise year-over-year. Despite a slight 3% decrease from the previous quarter, the total first-quarter revenue of NT$839 billion marked a robust 42% increase compared to the same period last year. Meanwhile, Bernstein has maintained its Outperform rating on TSMC with a price target of $251, citing the company’s high-quality performance and potential demand surge from a 90-day truce in trade tensions.
Citi, however, adjusted its outlook, lowering the price target from TWD1,400.00 to TWD1,050.00 while maintaining a Buy rating, reflecting concerns over potential tariff impacts and the global economic climate. BofA Securities reiterated a Buy rating with a $265 price target, focusing on TSMC’s $100 billion investment plans and addressing investor concerns about gross profit margins and capacity. The firm anticipates further insights during an upcoming conference in Taiwan. Additionally, Taiwan’s government activated a $15 billion stock stabilization fund to counter market volatility caused by new U.S. tariffs, aiming to restore investor confidence in the Taiwanese market.
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