TSMC Stock: New Highs in July?

TSMC Stock Poised for New Highs in July

TSMC stock has surged by 37% over the past three months, positioning the semiconductor giant for potential new highs in July. This momentum follows a strong performance that has pushed the stock near the top of its 52-week range. The company’s upcoming second-quarter results, scheduled for July 17, could provide the catalyst for further gains.

TSMC’s recent success is driven by its dominance in the global semiconductor market. According to TrendForce, the company’s foundry market share reached nearly 68% in the first quarter of 2025, marking a six percentage point increase year-over-year. This growth is supported by robust revenue figures, with April and May revenues up 48% and 40% respectively compared to the same period last year.

Growing Demand for AI Chips

The demand for artificial intelligence (AI) chips has been a significant driver of TSMC’s revenue growth. Major customers, including Nvidia, AMD, Broadcom, and Marvell Technology, rely on TSMC’s advanced manufacturing capabilities to produce high-performance, power-efficient chips. This demand has outpaced supply, prompting TSMC to build nine new fabrication plants in 2025 to meet the growing market needs.

TSMC’s strategic price increases for its current and next-generation process nodes are expected to enhance its margin profile and earnings growth. Customers are willing to pay a premium for TSMC’s technology, which enables the production of more advanced chips. The company forecasts an operating margin of 48% for Q2, up from 42.5% in the previous year. Analysts project a 54% increase in earnings to $2.28 per share, driven by stronger volume shipments and price hikes.

Investment Outlook

The strong demand for AI chips, as reflected in recent quarterly results from TSMC’s customers, suggests a solid outlook for the company. This trend could drive further upside in TSMC stock, making it an attractive investment before its quarterly report. TSMC is currently 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 appealing, considering the expected acceleration in bottom-line growth.

Investors may want to consider buying TSMC stock ahead of its quarterly report. Strong results and a positive outlook could help the stock reach new highs, positioning it as a key player in the semiconductor market.