The semiconductor giant, TSMC, is expected to record fourth-quarter profits up 58% year-over-year this week following surging demand. The company is one of the beneficiaries of the AI revolution and has among its customers Apple and Nvidia. The latter has benefited massively from AI, as it's powering many of the workloads.
According to Reuters, the Taiwanese company is expected to report profits of around T$377.95 billion ($11.41 billion). This figure provided by LSEG SmartEstimate draws on predictions from 22 analysts, with more weighting given to those who are more consistently accurate.
The news outlet said that TSMC faces some headwinds this year as the United States inaugurates President-elect Trump. US-based technology restrictions on China are one thing that could hurt TSMC, and another is any tariffs that the next administration puts into place to encourage domestic production.
TSMC could be given more favorable treatment, though, as it has invested massively in the United States. In Arizona alone, it has invested $65 billion on three plants, generating US jobs. Despite this, the impact tariffs will have on the company remain to be seen.
Despite the fact that TSMC boasts Nvidia as a customer, its share price has only gone up modestly over the last few years compared to its patron. Over the last five years, TSMC's share price has risen by about 214% while Nvidia has risen by 2,240%. If the company reports a good profit result this Thursday, it could further bolster its stock price.
Many people are wondering whether the US stock market will pull back soon and if the AI sector is being driven by hype. Even if it does turn out to be true that it's overhyped, technology firms will still be innovating in the space and TSMC will still have a steady stream of customers. In the coming years, firms will be launching AI agents, artificial superintelligence, and finally, artificial general intelligence and hardware suppliers will need to be there to enable them.
Source: Reuters
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