Loop Capital has initiated coverage on Intel with a Hold rating, setting a price target of $25. The firm highlights TSMC's (TSM, Financial) superior advanced-node manufacturing capabilities when compared to Intel's. According to Loop Capital, TSMC stands out as the preferred manufacturing partner to enhance Intel's competitiveness against industry players like AMD, Nvidia, and Arm.
The firm suggests that Intel's broader strategy may face challenges if its foundry segment cannot depend on the volume from Intel Products, potentially impacting the company’s ability to manage fixed costs efficiently. Loop Capital indicates that a strategic pivot away from the foundry model could make Intel shares more appealing.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 17 analysts, the average target price for Taiwan Semiconductor Manufacturing Co Ltd (TSM, Financial) is $251.93 with a high estimate of $300.00 and a low estimate of $119.37. The average target implies an upside of 5.48% from the current price of $238.85. More detailed estimate data can be found on the Taiwan Semiconductor Manufacturing Co Ltd (TSM) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, Taiwan Semiconductor Manufacturing Co Ltd's (TSM, Financial) average brokerage recommendation is currently 1.6, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Taiwan Semiconductor Manufacturing Co Ltd (TSM, Financial) in one year is $259.73, suggesting a upside of 8.74% from the current price of $238.85. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Taiwan Semiconductor Manufacturing Co Ltd (TSM) Summary page.
TSM Key Business Developments
Release Date: July 17, 2025
- Revenue: Increased 17.8% sequentially to $30.1 billion in USD terms.
- Gross Margin: Decreased 0.2 percentage points sequentially to 58.6%.
- Operating Margin: Increased 1.1 percentage points sequentially to 49.6%.
- Earnings Per Share (EPS): TWD15.36, up 60.7% year over year.
- Return on Equity (ROE): 34.8%.
- 3-nanometer Technology Revenue: Contributed 24% of wafer revenue.
- 5-nanometer Technology Revenue: Accounted for 36% of wafer revenue.
- 7-nanometer Technology Revenue: Accounted for 14% of wafer revenue.
- Advanced Technologies Revenue: Accounted for 74% of wafer revenue.
- HPC Revenue: Increased 14% quarter over quarter, accounting for 60% of total revenue.
- Smartphone Revenue: Increased 7%, accounting for 27% of total revenue.
- IoT Revenue: Increased 14%, accounting for 5% of total revenue.
- Automotive Revenue: Remained flat, accounting for 5% of total revenue.
- DCE Revenue: Increased 30%, accounting for 1% of total revenue.
- Cash and Marketable Securities: TWD2.6 trillion or USD90 billion.
- Accounts Receivable Turnover Days: Decreased by 5 days to 23 days.
- Days of Inventory: Decreased by 7 days to 76 days.
- Cash from Operations: TWD497 billion.
- Capital Expenditures (CapEx): TWD297 billion or USD9.6 billion.
- Cash Dividend: TWD117 billion for third quarter '24.
- Third Quarter Revenue Guidance: Expected between USD31.8 billion and USD33 billion.
- Third Quarter Gross Margin Guidance: Expected between 55.5% and 57.5%.
- Third Quarter Operating Margin Guidance: Expected between 45.5% and 47.5%.
- 2025 Capital Budget: Between USD38 billion and USD42 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Second-quarter revenue increased by 17.8% sequentially in US dollar terms, reaching $30.1 billion, exceeding guidance.
- Advanced technologies (7-nanometer and below) accounted for 74% of wafer revenue, showcasing strong demand for cutting-edge processes.
- TSMC's AI and HPC-related demand remains robust, contributing significantly to revenue growth.
- The company plans to invest $165 billion in advanced semiconductor manufacturing in the US, indicating strong future growth potential.
- TSMC's N2 and A16 technologies are on track, with N2 expected to enter volume production in the second half of 2025, promising future revenue streams.
Negative Points
- Gross margin decreased by 0.2 percentage points sequentially to 58.6%, impacted by unfavorable foreign exchange rates and overseas fab costs.
- The company anticipates continued gross margin dilution from overseas fabs, with a forecasted impact of 2% to 4% annually over the next five years.
- Foreign exchange rate fluctuations pose a significant risk, with a 1% appreciation of the NT dollar against the US dollar reducing gross margin by about 40 basis points.
- TSMC's fourth-quarter revenue is expected to decline, reflecting a cautious outlook due to potential tariff impacts and macroeconomic uncertainties.
- The company faces challenges in narrowing the supply-demand gap for advanced nodes like N3 and N5, indicating potential capacity constraints.
