TSMC Q2 Earnings Preview: Analysts Project 60% YoY EPS Increase, $114 Billion Revenue

Taiwan Semiconductor Manufacturing (TSM) is expected to post Q2 earnings of $2.37 per share, a 60% YoY increase, driven by booming demand for AI chips. Revenue is projected to reach nearly $114 billion, up from $87.9 billion in the prior year. TSM has become a critical supplier in the AI supply chain, with growing momentum behind its advanced chip packaging, CoWoS. Investors will watch for updates on production scalability, margin trends, and AI demand shaping the company's roadmap.

Taiwan Semiconductor Manufacturing (TSM) is set to release its second-quarter (Q2) 2025 earnings on July 17, with analysts projecting a significant rise in earnings driven by robust demand for AI chips. The company is expected to post earnings per share (EPS) of $2.37, representing a year-over-year (YoY) increase of about 60% [1]. Revenue for fiscal 2025 is projected to reach nearly $114 billion, up from $87.9 billion in the prior year [1].

TSMC has emerged as a critical supplier in the AI supply chain, with growing momentum behind its advanced chip packaging known as CoWoS (Chip on Wafer on Substrate). The company is forecast to double both its AI-related revenue and CoWoS capacity this year as tech giants rush to secure high-performance chipsets [1]. This growth is supported by the broader rally in AI-linked semiconductor stocks [1].

Investors will closely monitor TSM's Q2 earnings for updates on production scalability, margin trends, and how AI demand continues to shape the company's roadmap. The results will offer a key read on global AI infrastructure spending as chipmakers race to meet hyperscaler demand [1].

Analysts have set an average target price of $228.33 for TSM, with a high estimate of $270.00 and a low estimate of $119.37. This average target implies a downside of -0.90% from the current price of $230.40 [1]. GuruFocus estimates the GF Value for TSM in one year to be $221.11, suggesting a downside of -4.03% from the current price of $230.40 [1].

TSMC's strong performance in the AI semiconductor market is reflected in its recent Q2 sales, which surged by 39% YoY, exceeding market expectations. The growth is primarily attributed to sustained demand for AI-driven chips, bolstering optimism around the company's prospects [4]. The company's CEO, C.C. Wei, reaffirmed the strong demand for AI accelerators, projecting a doubling in revenue from these products in 2025 [4].

While TSM's Q2 results are encouraging, several risks loom on the horizon, including geopolitical tariffs, competitive pressures from companies like Samsung, and potential macroeconomic slowdowns [4]. However, TSMC's strong market position and leadership in advanced nodes provide a buffer against these risks [4].

Investors should consider TSM as a core holding in their portfolios, given its pivotal role in the AI semiconductor cycle. Diversification through broad semiconductor ETFs and hedging with chip equipment stocks can help manage risks associated with TSM-specific investments [4].

References:
[1] https://finance.yahoo.com/news/tsmc-q2-earnings-preview-expect-164426580.html
[2] https://www.tradingview.com/news/gurufocus:66842fde3094b:0-tsmc-q2-earnings-preview-what-to-expect-from-upcoming-report/
[3] https://www.ainvest.com/news/amd-stock-jumps-4-hsbc-raises-target-200-ai-chip-competition-nvidia-2507/
[4] https://www.ainvest.com/news/taiwan-semiconductor-q2-sales-soar-39-strong-ai-demand-2507/