TSMC Stock: New Highs in July?

TSMC Stock May Jump to New Highs

Taiwan Semiconductor Manufacturing stock has jumped sharply, gaining 37% over the past three months. There is a good chance that the foundry could reach new highs in July. Following its recent surge, TSMC stock is trading near the top of its 52-week range. The company is set to release its second-quarter results on July 17, which could propel it to new 52-week highs.

TSMC Dominance in Semiconductor Market

TSMC is the world's largest semiconductor foundry and is increasing its dominance. According to TrendForce, TSMC's global foundry market share reached almost 68% in the first quarter of 2025, a six percentage point increase year-over-year. The company's market share gains likely continued into Q2, supported by strong monthly revenue figures. April revenue increased 48% year over year, and May revenue was up almost 40%.

Analysts project a 37% revenue increase for TSMC's Q1. The revenue growth in the first two months of the quarter suggests the company may exceed expectations when it releases its results. Demand for artificial intelligence (AI) chips, manufactured for companies including Nvidia, AMD, Broadcom, and Marvell Technology, has been outpacing supply. TSMC is building new fabrication plants to capitalize on this demand and is on track to construct nine new production facilities in 2025.

TSMC is reportedly increasing prices for its current and next-generation process nodes, which could improve its margin profile and earnings growth. Customers are willing to pay a premium due to TSMC's technology advantage, enabling the production of more powerful and power-efficient chips. TSMC forecasts an operating margin of 48% for Q2, a significant increase from 42.5% in the prior year period. Analysts expect TSMC's earnings to increase by 54% this quarter to $2.28 per share. Stronger volume shipments and price hikes could lead to even greater earnings growth.

The strong demand for AI chips, evident in recent quarterly results from TSMC's customers, indicates a solid outlook. This could drive further upside in TSMC stock, making it a potentially attractive investment before its quarterly report. TSMC is trading at 27 times sales, a discount compared to the Nasdaq-100 index's price-to-earnings ratio of 32. The forward earnings multiple of 24 is also attractive, given the expected acceleration in its bottom-line growth rate.

Investors may want to consider buying this AI stock before its quarterly report, as strong results and outlook could help TSMC reach new highs.