Nvidia Supplier TSMC Sees Growth Metrics Spike, Stock Looks Set for Breakout

Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), Nvidia's biggest manufacturing partner, saw a significant spike in its growth metrics in Benzinga's Edge Stock Rankings, with a growth score of 88.33 points, up from 29.96 last week. The company reported a strong Q2 performance, with $31.7 billion in revenue, up 38.6% YoY, and profits of $13.03 billion, beating consensus estimates. TSMC was also exempt from Trump's 100% tariffs on semiconductors and finalized a deal with Nvidia CEO Jensen Huang to make six new products.

Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), Nvidia's primary manufacturing partner, has experienced a significant spike in its growth metrics, as reported by Benzinga. TSMC's growth score in Benzinga's Edge Stock Rankings surged from 29.96 to 88.33 points, reflecting a monumental increase of 58.37 points. This upward trend is attributed to the company's robust financial performance and strategic initiatives.

In its second-quarter (Q2) results, TSMC reported $31.7 billion in revenue, a 38.6% year-over-year (YoY) increase, surpassing consensus estimates of $30.04 billion. The company also posted profits of $13.03 billion, or $2.47 per share, which exceeded analysts' expectations of $2.37 per share. These impressive figures underscore TSMC's strong market position and growth trajectory.

The company's exemption from Trump's 100% tariffs on semiconductors also contributed to the stock's recent surge. Taiwanese officials confirmed that TSMC was excluded from these tariffs, a key catalyst that boosted investor confidence. Furthermore, Nvidia CEO Jensen Huang visited Taiwan last week, emphasizing TSMC's crucial role in the semiconductor industry and finalizing a deal to produce six new products for the company. This strategic partnership between TSMC and Nvidia is expected to further bolster both companies' market positions and drive innovation in the semiconductor sector.

Shares of TSMC have been performing favorably, with a 1.12% increase on Monday, trading at $235.59, and another 0.12% gain after hours. The stock scores highly on momentum, growth, and quality metrics, with a favorable price trend across short, medium, and long-term horizons.

In addition to these developments, TSMC is also making significant strides in its manufacturing capabilities. The company is phasing out all Chinese technology from its new 2-nanometer (2-nm) production lines to avoid potential US sanctions. This move is tied to the proposed US "Chip EQUIP Act," which aims to maintain an edge over China in the AI race. TSMC is accelerating its US expansion, with up to 30% of its most advanced production, including 2-nm and below, potentially coming from US plants in the future.

References:
[1] https://finance.yahoo.com/news/nvidia-supplier-turning-heat-growth-233116171.html
[2] https://the-decoder.com/tsmc-is-removing-all-chinese-equipment-from-its-2-nm-chip-factories-sources-report/
[3] https://www.ainvest.com/news/nvidia-ceo-praises-tsmc-greatest-companies-humanity-2508/