Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) Q3 Revenue Beats Expectations; Wedbush Bullish on AI-Driven Growth Prospects, Maintains "Outperform" Rating

Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) third-quarter revenue beat market expectations, further highlighting the strong growth momentum in artificial intelligence (AI) chip demand. U.S. investment bank Wedbush Securities believes that the latest revenue data released by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR sends a positive signal for its fourth-quarter performance outlook and continues to view it as a high-quality investment target for exposure to the long-term AI growth trend. As the world's largest wafer foundry, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR reported record third-quarter revenue of NT$1.49 trillion (approximately US$46.71 billion), up 50% year over year, exceeding the NT$1.46 trillion forecast by LSEG SmartEstimate and also surpassing the company's previous revenue guidance range of US$44.6 billion to US$45.8 billion. Wedbush analyst Matt Bryson noted in a report that although Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR has consistently been able to slightly exceed its own performance guidance during the AI boom, this beat was slightly larger than usual. For example, last quarter's revenue beat was only about 1%. Bryson said that because the third-quarter USD/TWD exchange rate was basically in line with the 32.0 level used in the company's previous guidance, the impact of exchange rate factors on performance was relatively neutral, so the revenue beat mainly reflected the underlying strength of the business itself. Against this backdrop, the firm expects Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's third-quarter gross margin to reach at least the midpoint of its previous guidance range of 65% to 67%, namely 66%, and potentially exceed the firm's own forecast of 66%. By comparison, the consensus market expectation is 66.5%. Bryson believes that with revenue exceeding expectations, Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's capacity utilization may improve further, thereby supporting gross margin. Given that the company has historically tended to provide relatively conservative guidance, actual profitability may also be better than previously expected. The firm remains optimistic about Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's long-term investment value. Bryson pointed out that Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR holds a near-monopoly market position in the world's most advanced chip manufacturing, and all current major AI technology development paths are highly dependent on its advanced process capacity. This enables Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR to continue benefiting from growing AI chip demand. He said: "Given Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR's near-monopoly position in cutting-edge chip manufacturing and the fact that all current major AI development paths depend on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, we still believe this stock is one of the best and most robust ways to invest in the future AI-dominated era." Bryson maintained an "Outperform" rating on Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and gave it a target price of NT$3,000 for its Taiwan-listed shares. Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR plans to release its full third-quarter financial results on October 15 and issue its latest performance guidance. At that time, investors will focus on the company's gross margin performance, advanced process capacity utilization, and management's latest assessment of fourth-quarter AI chip demand and revenue growth.