TSMC Stock Soars After Q2 Profit Jumps 60% on AI Chip Surge

July 17 – Shares of Taiwan Semiconductor Manufacturing (NYSE:TSM) climbed about 4% in pre?market trading Wednesday, driven by stronger?than?expected second?quarter results.

TSM posted net profit of NT$398.27 billion or $2.47 per ADR, up 61% from $1.48 a year earlier, while revenue rose 38.6% to $31.7 billion, topping its own guidance of $29.2 billion.

The foundry credited robust demand for artificial intelligence and high?performance computing chips. Advanced process technologies, including 3?nanometer, 5 nm and 7 nm nodes, accounted for 74% of wafer revenue in the quarter. From a product mix standpoint, high?performance computing made up 60% of sales and smartphones contributed 27%.

Regionally, North America remained the largest market at 75% of sales, with China and Asia Pacific at 9% each, Japan at 4% and Europe, the Middle East and Africa at 3%.

Looking ahead, TSM forecast third?quarter revenue between $31.8 billion and $33 billion, with gross margins of 55.5% to 57.5% and operating margins of 45.5% to 47.5%.

The company also raised its full?year fiscal 2025 revenue growth target to 30% from 20%, reflecting confidence in sustained AI?driven demand.

This article first appeared on GuruFocus.