TSMC's stock has been upgraded by UBS following its strong Q3 performance.
The company reported a gross margin of 57.8%, surpassing expectations and attributing the success to higher utilization rates and cost improvements. TSMC's guidance for Q4 suggests continued momentum, with expectations of gross margin expansion to a range of 57.0% to 59.0%.
The company's strong performance in Q3 was driven by increased demand for its advanced technologies in the smartphone and AI sectors. TSMC's financial metrics reflect strong demand and growth potential, with a sequential revenue increase of 12.8% in Q3.
UBS projects that TSMC's gross margin will further increase to 58.5% in 2025, based on factors such as price increases for its advanced technologies and improved utilization rates. TSMC's capital expenditures for 2024 are projected to exceed $30 billion, reflecting its commitment to maintaining a competitive edge.
The company's market capitalization currently stands at $842.26 billion, highlighting its dominant position in the semiconductor industry. TSMC has also raised its dividend for three consecutive years, making it an attractive option for investors seeking growth and income.
As TSMC continues to navigate the semiconductor market, its focus on advanced technologies and operational efficiencies will be crucial in maintaining its leadership position.