Summary:
TSMC stock price jumps 4% after Q2 earnings beat and raised 2025 revenue forecast, driven by strong demand for AI and advanced chips.
The TSMC stock price surged over 4% in after-hours trading following the release of an impressive second-quarter earnings report and a significant upward revision of its 2025 revenue forecast. The results exceeded market expectations, driven by surging demand for advanced AI chips from key clients such as NVIDIA and AMD, reinforcing TSMC's dominant position in the global semiconductor supply chain.
On 17 July, Taiwan Semiconductor Manufacturing Company (TSMC) reported a second-quarter revenue of $30.07 billion, representing a 44% year-on-year increase. Earnings per ADR (American Depositary Receipt) reached $2.47. up 68% from the same period last year. One ADR corresponds to five common shares.
These results were well above analysts' forecasts. TSMC's operating margin hit 49.6%, surpassing the high end of its own guidance, while its gross margin came in at 58.6%, also at the top end of projections. This strong performance reflects the strength of the company's operations, especially in its advanced process technologies.
The better-than-expected results were primarily fuelled by the rapid uptake of advanced semiconductor nodes. In Q2. chips produced using 3nm and 5nm technologies accounted for a combined 60% of total wafer revenue. These advanced processes are critical to the performance and efficiency of high-end AI chips and cutting-edge consumer electronics.
TSMC's ability to deliver at scale with these technologies gives it a substantial advantage over competitors. As global tech firms race to develop faster, more powerful AI applications, the demand for TSMC's most sophisticated processes continues to rise.
TSMC highlighted the accelerating demand for AI applications as a key factor in its decision to raise its full-year revenue guidance. The company now expects 30% revenue growth in 2025. measured in US dollars—an increase from the previous estimate of around 25%.
This revision signals strong confidence in sustained demand from AI-focused clients. As major players like NVIDIA, AMD, and even Intel increasingly rely on TSMC's foundry services to produce high-performance chips, the company appears well-positioned to benefit from the broader AI-driven transformation of global technology markets.
In addition to its robust Q2 report, TSMC also provided optimistic guidance for the third quarter. The company expects revenue to range between $31.8 billion and $33 billion, again exceeding consensus forecasts. This outlook reinforces market belief that TSMC's growth trajectory will continue through the second half of the year.
Analysts have taken note of the consistency in TSMC's financial execution and the quality of its customer base, which includes the most demanding and high-value chip developers in the industry.
Following the earnings release, the TSMC stock price rose more than 4% in US after-hours trading, reaching $248 per share. Since the beginning of 2025. TSMC's stock has climbed 21%, reflecting growing investor confidence in its ability to capture value from the booming AI and high-performance computing markets.
The share price rally underscores the market's recognition of TSMC's importance not just as a manufacturer, but as a key enabler of next-generation technologies across sectors including cloud computing, automotive, consumer electronics, and industrial AI.
TSMC's strong second-quarter earnings, advanced chip capabilities, and raised outlook for 2025 reinforce its reputation as a vital player in the global tech ecosystem. The continued rise of the TSMC stock price reflects confidence in the company's long-term prospects amid the AI revolution. As demand for powerful semiconductors accelerates, TSMC appears poised to remain at the forefront of innovation and growth in the years ahead.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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