Taiwan Semiconductor Earnings Analysis and Technicals

Taiwan Semiconductor 

TSM shares are trading higher after the company’s latest earnings report came in above expectations. The semiconductor company beat on revenue and profit projections, and raised forecast for this year. Leaders at the company now see 20% growth in 2024, citing demand for artificial intelligence to be the main reason. Since the rise of ChatGPT and generate AI, companies in all types of sectors are racing to become leaders in the space, and that demand has translated to more revenue for semiconductor giants like TSM, Nvidia, AMD…etc. 

Looking at their year over year revenue trend, TSM was growing steadily between 2017-2022, but had a large dip in revenue in 2023. However their earnings forecast for 2024 is set to bring them back to positive growth. The company is also very profitable and their price to earnings ratio is only 18, which is considered much healthier than many other companies in their space right now. Their balance sheet is at about a 3:1 ratio (assets and liabilities), and free cash flow has bounced back to a positive territory. Overall TSM is a top contender to be a winner in 2024, especially if they can sustain positive growth. 

Technical analysis: 

We’d like to see the earnings gap up hold steady and maintain consolidation around the green zone. Next breakout point is 112.00 for a price target of 117.00-118.00.