Taiwan Semiconductor Manufacturing: Is the Stock a Buy as Revenue Continues to Soar?
TSMC turned in another strong quarter and upped its guidance.
Overview
Demand for artificial intelligence (AI)-related semiconductor chips is booming, and Taiwan Semiconductor Manufacturing (NYSE: TSM), which has a near-monopoly over their production, continues to see its revenue surge. And with the stock trading at a forward P/E of around 20 times next year's earnings, now looks like a good time to scoop up some shares.
As demand for its chip manufacturing services soars, TSMC once again reported climbing revenue and an expanding gross margin when it reported its second-quarter results last week. Revenue jumped 34% year over year to $40.7 billion, while its gross margin came in at 67.6%, up 910 basis points from 58.6% a year ago. The company has continually warned investors that its gross margin would be negatively impacted by moving to more advanced nodes and increased manufacturing in the U.S., but it guided for gross margin to remain robust in Q3, between 65% and 67%.
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Originally published at www.fool.com.