We recently compiled a list of the Jim Cramer is Talking About These 14 Stocks Before Earnings. In this article, we are going to take a look at where Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) stands against the other stocks Jim Cramer is talking about before earnings.
As earnings season kicks off, Jim Cramer of Mad Money offered insights on what investors should watch in the coming week on Wall Street. He highlighted the anticipated reports from several major banks, along with a few other companies, as key events to monitor.
Cramer expressed optimism about the current market conditions, noting that the situation aligns with his previous predictions that the market would thrive once the Federal Reserve began reducing interest rates while the economy remained strong. He remarked on the spectacular earnings reported by some major banks on Friday, emphasizing that this positive news is particularly impactful now, as opposed to previous instances when the Fed was tightening, causing good news to go largely unnoticed. Cramer believes that with the Fed now supportive of the market, there is potential for more favorable times ahead.
Looking to Monday, Cramer predicted that the focus will shift away from earnings reports due to other significant developments over the weekend. He mentioned the anticipated unveiling of a Chinese stimulus package and noted that although the rally in China has stalled, it could regain momentum if the Chinese government injects substantial funds into real estate and the stock market.
“Now, on Monday, we won’t be focused on earnings. There’s a lot of other stuff happening over the weekend. For instance, I think we’ll be parsing the Chinese stimulus package that’s going to be unveiled. The China rally is stalled, but it can get rolling again if the Chinese Communist Party keeps throwing tens of billions of dollars for the stimulus at real estate, at the stock market.”
Cramer warned that the financial sector will face a significant test on Tuesday, as different banks will be reporting their earnings. Cramer reminded investors that we are just at the beginning of one of the year’s four reporting periods, which can be chaotic and open to various interpretations.
“We’re at the beginning of one of the year’s four reporting periods,” he said. “They’re jumbled. They’re open to a lot of interpretation. They’re fast. So listen to the calls, ponder a moment, and only then should you pull the trigger.”
Our Methodology
For this article, we compiled a list of 14 stocks that are slated to release earnings this week and were discussed by Cramer during his episode of Mad Money on October 11. We listed the stocks in ascending order of their hedge fund sentiment as of the second quarter, which was taken from Insider Monkey’s database of more than 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up of a complex network of integrated circuits used in logic semiconductors.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 156
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) will conduct its third-quarter earnings conference on October 17 and Cramer said that he will be tuned in to listen to the call.
“Thursday, Taiwan Semi reports. What can I say? This is the company that manufactures NVIDIA’s chips. The stock’s been very, very strong, really ramped today. Call’s basically in the middle of the night because the times are different. Don’t worry. I’m going to set the alarm and I’m going to listen. No, forget the alarm. I just won’t go to sleep after the close.”
Taiwan Semiconductor (NYSE:TSM) is a leading player in the semiconductor industry, engaged in the manufacturing, packaging, testing, and sale of integrated circuits and various semiconductor devices. The company has outlined ambitious growth expectations, projecting a compound annual growth rate for revenue between 15% and 20% over the coming years. Additionally, it has forecasted maintaining a long-term gross margin of 53% or higher, alongside a return on equity (ROE) of 25% or more throughout economic cycles.
In the second quarter, Taiwan Semiconductor (NYSE:TSM) reported consolidated revenue amounting to NT$673.51 billion (1 NT = $0.031), with a net income of NT$247.85 billion. Compared to the previous year, revenue for this quarter saw a remarkable increase of 40.1%, while net income rose by 36.3%.
The company’s client base includes prominent names that highlight its significance in the AI chip sector across various industries. NVIDIA, a leader in this market, utilizes the company’s process nodes to produce chips that offer superior performance and energy efficiency compared to competitors. Moreover, partnerships with Apple enable the company to expand its reach in the smartphone arena.
Overall TSM ranks 1st on our list of the stocks Jim Cramer is talking about before earnings. While we acknowledge the potential of TSM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
