TSMC: The Bull Run Continues with 57% Appreciation Since Last Coverage

Taiwan Semiconductor Manufacturing Company Limited (TSMC) has seen a 57% increase in shares since the last coverage as a Strong Buy. The recent pop in stock price after decent earnings indicates a strong bull run that may continue.

Taiwan Semiconductor Manufacturing Company Limited (TSMC) has seen a significant 57% increase in shares since the last coverage, with a strong bull run that may continue. The recent pop in stock price after robust earnings indicates a positive outlook for the company.

TSMC reported strong Q2 earnings, with revenue climbing 38.6% year-over-year (but 44.4% in USD terms) and net profits growing by 60.7%. The company's gross profit margin for the quarter was 58.6%, operating margin was 49.6%, and net margin was 42.7%. These impressive figures reflect the company's dominant position in manufacturing advanced AI processors for clients, including Nvidia and Apple [2].

The standout performance was driven by TSMC's high-performance computing division, which includes artificial intelligence and 5G applications, contributing 60% of total revenue. CEO C.C. Wei attributed this growth to "continued robust AI and high-performance computing-related demand" [1].

Looking ahead, TSMC expects Q3 revenue between $31.8 billion and $33 billion, with gross margins ranging from 55.5% to 57.5% and operating margins between 45.5% and 47.5%. While these numbers indicate a sequential decline in profitability, the company's technological leadership and pricing power in advanced technologies suggest that investors remain confident in TSMC's prospects [2].

TSMC faces potential headwinds from U.S. trade policies, with President Trump threatening "reciprocal tariffs" on Taiwan and potential additional tariffs on semiconductors. However, CEO Wei indicated that customer behavior hasn't changed in the second half of 2025, and the company's impressive margins demonstrate the pricing power of its advanced technologies [2].

Despite these potential risks, TSMC's strong performance and technological leadership make it a compelling investment opportunity. At a P/E ratio of only 22.5 and with sales still growing briskly, it's hard to call TSMC stock anything but a "buy" [1].

References:

[1] https://finance.yahoo.com/news/why-taiwan-semiconductor-stock-popped-170137608.html
[2] https://www.tikr.com/blog/tsmc-nyse-tsm-stock-is-up-4-after-profit-surges-61-in-q2