TSMC stock price rises 2.7% after raising revenue growth forecast

TSMC stock price rises 2.7% after raising revenue growth forecast

Taiwan Semiconductor Manufacturing Company (TSMC) has seen its stock price rise by 2.7% following the announcement of a revised revenue growth forecast. The world's largest contract chipmaker, TSMC, projected its 2025 revenue to increase around 30% in U.S. dollar terms, up from its previous estimate of "close to mid-20s percent" [1]. This upward revision was primarily driven by strong demand for artificial intelligence (AI) and high-performance computing (HPC) applications.

TSMC's CEO, C.C. Wei, stated during the company's second-quarter earnings call that the forecast did not factor in potential increases from lifted U.S. restrictions on Nvidia’s H20 chips to China, which he described as "good news" [2]. The company expects its third-quarter revenue to be between $31.8 billion and $33 billion, surpassing analyst expectations of $31.67 billion [1]. This growth is attributed to robust demand for AI and HPC chips, which contributed 60% to TSMC's total revenue last quarter [2].

The revised forecast reflects TSMC's confidence in the continued growth of the AI market, driven by increasing demand for advanced AI processors. The company's advanced nodes, including the 3nm and 5nm process nodes, accounted for a significant portion of its wafer revenue. The 3nm node alone contributed 22% of sales in the second quarter [3].

Despite the positive outlook, TSMC remains cautious about potential headwinds, such as U.S. tariffs and a strong Taiwan dollar. The company has taken steps to hedge foreign exchange risks by injecting $10 billion into its subsidiary TSMC Global [2]. Additionally, TSMC is speeding up chip production schedules at its factories in Arizona to meet the high demand from its leading U.S. customers [2].

The stock price increase reflects investors' optimism about TSMC's ability to capitalize on the growing AI market and its structural advantages in leading-edge nodes. The company's valuation, trading at a 16.37 forward P/E ratio, offers better risk-adjusted returns compared to peers like NVIDIA, which is trading at a 72.85 forward P/E ratio [3].

References:
[1] https://www.investopedia.com/chip-maker-tsmc-s-stock-rises-on-upbeat-outlook-for-revenue-strong-ai-demand-11774008
[2] https://www.taipeitimes.com/News/biz/archives/2025/07/18/2003840459
[3] https://www.ainvest.com/news/taiwan-semiconductor-manufacturing-company-q2-earnings-call-record-quarterly-profit-ai-demand-q3-revenue-outlook-set-2507/