원문 보기
Taiwan semiconductor manufacturing is scheduled to report third quarter 2024 Financial results on October 17th that has many investors curious asking if they should buy Taiwan semiconductor stock before earnings or after earnings or should they even buy this stock at all I'll answer that question in this video I'll also preview what investors can expect from Taiwan semiconductor when the company announces these Financial results of cournd apple which are both interesting company let's get an overview of the end markets that Taiwan semiconductor generates revenue from here's a nice breakdown the company provided for its second quarter 2024 Revenue by platform and you can see it's dominated by two segments HPC which is high performance Computing this is artificial intelligence and then you have smartphone these two markets represent 85% of the company's Revenue in the second quarter of 2024 52% from HPC and 33% from smart phone now when the company reports its third quarter 2024 numbers I wouldn't be surprised if HPC takes an even larger share you can see here the growth rate by platform HPC high performance Computing is growing at the fastest rate of the company overall and the good news for Taiwan semiconductor is that the company's largest segment is the one that's also growing the fastest that's rare to have that benefit as a business where you're most important your most valuable segment is the one that's growing the fastest and thankfully Taiwan semiconductor investors do have that benefit now high performance Computing is mostly in data centers that are now optimized for artificial intelligence this is where Nvidia is thriving and Taiwan semiconductor is a supplier for NVIDIA Nvidia does not manufacturer itself it outsources the manufacturing to companies like Taiwan semiconductor and so when as Nvidia has thrived that's built up that business for Taiwan semiconductor also for Taiwan semiconductor you can see in the latest quarter smartphone segment Revenue quarter over quarter was down 1 percentage point I wouldn't be surprised if this segment turns positive in this quarter there have been reports coming out that the smartphone segment Revenue has rebounded in the last couple of months and that should also benefit Taiwan semi conductor of course Apple's latest generation iPhone 16 set to come out it's already out but set to come out in terms of the results in company's financial statements in the current quarter and the next couple of quarters Taiwan semiconductor does provide investors with a monthly update of its year-over-year revenue and over the last 3 months its Revenue growth has absolutely surged 33% Revenue growth in June 44% % Revenue growth in July and again 33% Revenue growth in August so when the company reports its quarterly Financial results it's likely to contain significant Revenue growth year-over-year for Taiwan semiconductor so management guided investors to expect something between 22.4 billion and 23.2 billion in revenue for the third quarter of 2024 if the company does hit that Target it would be a roughly 10% increase from the previous quarter where it delivered 2.82 billion in Revenue that being said the company's Revenue in the previous quarter beat its own guidance of a range of 19.6 to 20.4 billion so gain beats its guidance not just because of the performance from the previous quarter but also because of those end markets that are most important to to Taiwan semiconductor as we saw in its Revenue breakdown HPC and smartphone have performed better than expected in the last 3 months from the data I've seen from various sources including company financial statements industry sources and macroeconomic numbers also Taiwan semiconductor guiding to operating profit margin of 43.5% at the midpoint that would be up from 42 1.5% at the midpoint in the previous quarter one big thing I'm looking for from Taiwan semiconductor after its earnings release in the conference call where management discusses their results with Wall Street analyst is a pricing increase from what I read of their comments in the previous quarter I took it to mean that they might be raising prices pretty soon Taiwan semiconductor already operates at very strong profit margin as you saw here 43% is a very good operating profit margin for a manufacturing company this isn't a software company it's rare to see manufacturing companies with this kind of lso hinted at the fact that it had retained some pricing power and it hadn't increased prices in a while and it was poised to raise prices it didn't say those words directly but from my reading of their conference call that's what I took it to mean so I would like to see more clarity on that and I'm pretty confident that one of the analysts on the earnings call will ask about it if management doesn't volunteer the information upfront and so that's going to be interesting to see if the company is increasing prices that would be big news for Taiwan semiconductor stock investors and remember the companies that it's selling to their profit margins have soared nvidia's profit margin is approaching over 60% operating profit margin so it can absorb a price increase and Taiwan semiconductor has the negotiating power to exercise that price increase at least to some of its customers like Nvidia one of them maybe not to Apple but with Nvidia maybe it does have pricing power and maybe to some of its other companies some of its other buyers will have some pricing power to negotiate it's interesting to be sure now I've hat's been one of my better recommendations this year the price is up to $181 per share up from around $100 per share to begin the year Taiwan semiconductor is now trading at its highest or near its highest forward price to earnings valuation going back a couple of years certainly close to the highest it's traded at this year at a forward PE of 2.64 so given this relatively higher valuation for Taiwan semiconductor stock for investors that are interested in buy this is one that might be better to buy after earnings I would wait my purchase towards after earnings sometimes I say to do half before and half after in this case I would say you can do 25% before and 75% after because I feel the risks are weighted towards the downside for Taiwan semiconductor stock its recent results have been so phenomenal that there might be a let down if the guidance for the next quarter is not as strong as expected if we don't get any information about pricing increases and future prospects for 2025 2026 if might create a bit of a let down for TSM stock investor
Comments 0