Why TSM Stock Is Climbing Today

Taiwan Semiconductor (TSM) is advancing 5% after the huge, Taiwan-based chip manufacturer reported stronger-than-expected fourth-quarter results today.

A Look at TSM’s Q4 Results and Statements

The company’s  Q4 sales jumped 37% versus the same period a year earlier to $26.88 billion. That was $890 million above analysts’ average estimate. Further, TSM’s earnings per share rose to $2.24, compared with $1.44 in Q4 of 2023. Analysts, on average, had expected the firm’s Q4 EPS to come in at $2.23.

“With our strong technology leadership and differentiation, we are well-positioned to capture the multiyear structured demand from the industry megatrends of 5G, AI, and” high-performance computing (HPC),” CFO Wendell Huang asserted on the company’s Q4 earnings call.

HPC accounted for 53% of its Q4 revenue, versus 43% in Q4 of 2023.

For Q1, the chip maker provided revenue guidance of $25.0 billion to $25.8 billion. Analysts, on average, had expected the company’s sales to come in at $24.75 billion.

“Moving into first quarter 2025, we expect our business to be impacted by smartphone seasonality, partially offset by continued growth in AI-related demand.” Huang said in a statement.

The Price Action of TSM Stock

In the last month, the shares have advanced 11.5%, while they are up 5.5% in the last three months.

While we acknowledge the potential of TSM, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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.

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Disclosure: None. This article is originally published at Insider Monkey.