TSMC’s revenue is about to hit highs! Foreign media points out that the stock price continues to rise "1 key", saying it is worth buying

TSMC is the world's largest foundry.

[Financial Channel/Comprehensive Report] TSMC (2330)’s third-quarter revenue hit a record high, demand for AI chips continues to be strong, and the market is optimistic that the stock price still has room to rise. According to the analysis of foreign media "The Motley Fool", although the overall economic uncertainty is increasing and the consumer electronics market is under pressure, it is optimistic that TSMC's stock price may continue to rise after hitting a new quarterly revenue high. There is only one reason: "The demand for AI chips still exceeds TSMC's production capacity" and will become the main driving force for continued growth in its revenue and profits.

According to reports, TSMC’s third-quarter revenue increased by 41% year-on-year to US$46.7 billion, setting a new single-quarter high. Among them, the high-performance computing (HPC) business, including AI data center chips, accounts for 68% of total revenue, showing that AI-related demand has become an important pillar of TSMC's operations.

Looking forward to the fourth quarter, TSMC estimates that revenue will be between US$52.3 billion and US$54.3 billion, with an annual growth rate of approximately 58% based on the midpoint of the forecast range. If revenue performance is in line with expectations, it means that TSMC's growth momentum is still expected to further accelerate driven by demand for AI chips.

TSMC previously predicted that sales of AI accelerators will grow all the way to 2029, with the annual growth rate remaining in the mid- to high-50% range. At a press conference on October 15, TSMC Chairman Wei Zhejia said that "the growth rate may be higher." He added that market demand "still far exceeds our current supply capacity."

Wei Zhejia also said that taking into account the uncertainty of the overall economy, TSMC will take a cautious approach to its planning for 2027. Rising component prices are putting pressure on demand in the consumer electronics market as device manufacturers are raising prices to offset the impact of cost inflation. This could put pressure on TSMC's smartphone business, which accounted for 21% of TSMC's third-quarter revenue.

The report believes that despite this, the sharp increase in demand for AI chips is still TSMC’s growth momentum. TSMC’s current share price is about 19 times analysts’ estimated 2027 earnings per share, and Wall Street expects TSMC’s profits to grow 38% annually in the next few years.

Considering that TSMC is expected to maintain high double-digit profit growth, this valuation is quite attractive and makes TSMC stock a worthy buy now.