TSMC’s 2Q Results To Further Boost $420-Billion Rally As AI Demand Soars

Taiwan Semiconductor Manufacturing Co.’s $420 billion equity rally this year will get a valuation test next week when it reports earnings, with analysts expecting the chipmaker to raise full-year sales forecasts, Jeanny Yu reported for Bloomberg News.

TSMC has become a favorite artificial intelligence bet for investors, with few other competitors able to duplicate its cutting-edge technology. I Photo: Taiwan Semiconductor Manufacturing

The world’s biggest contract chipmaker will probably report a 29% increase in second-quarter net income on Thursday, according to the median estimate of analysts surveyed by Bloomberg.

More importantly, analysts from JPMorgan Chase & Co. to Morgan Stanley expect it to also raise its full-year sales guidance, justifying another round of valuation expansion.

Just like Nvidia Corp., TSMC has become a favorite artificial intelligence bet for investors, with few other competitors able to duplicate its cutting-edge technology.

That’s giving it the bargaining power to raise prices for its advanced chips as demand blossoms. Analysts have been playing catchup in valuation and price targets, with the company surging to hit a $1 trillion market capitalization in the U.S. earlier this week.