Taiwan Semiconductor Manufacturing Company (TSM) gave an update on its revenue performance for the month of July this Friday morning, which initially sent shares 3% higher. Since the market opened, though, they’ve stayed around even on the day.

The chip manufacturer’s $7.9 billion in sales worked out to a 45% growth in revenue. This has given the AI industry hope as the sentiment is perhaps at its lowest point since the technology’s inception. 

Industry leaders like NVDA, AMD, SMCI, and MSFT are all down in the past month as concerns grow that the tech might not deliver the returns that have been expected. But, as a major supplier for Nvidia, Advanced Micro Devices, and even Apple, TSMC is well positioned. 

Coming off the last earnings report the company remains upbeat. CEO C.C. Wei mentioned that there is room to boost profits through price hikes amidst the increased transition to its most advanced offerings.

The forecasted revenue growth for the third quarter is currently pegged at 37%, or $23.2 billion. This recent update suggests that TSMC could easily outperform that estimate. However, there’s still a ways to go before October 11, the earliest the company will release its Q3 update.

In the meantime, TSM has been on a torrent pace so far through 2024. The stock is up nearly 62% year-to-date and has gained almost 9% in the last week alone while most other stocks in its segment have fallen.

So, where does that leave investors? We’ve got 3 things you’ll want to see through the VectorVest stock analysis software whether you’re currently invested in this stock or are looking for an opportunity to trade TSM.

TSM Has Very Good Upside Potential, Excellent Safety, and Fair Timing

VectorVest is a proprietary stock rating system that tells you what to buy, when to buy it, and when to sell it - saving you time and stress while empowering you to win more trades.

It does this through 3 proprietary ratings: relative value (RV), relative safety (RS), and relative timing (RT). Each sits on a scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy.

Better yet, the system issues a clear buy, sell, or hold recommendation for any given stock at any given time based on its overall VST rating. As for TSM, here’s what we’ve uncovered:

  • Very Good Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. It offers a far superior indicator to the typical comparison of price to value alone. TSM has a very good RV rating of 1.25.
  • Excellent Safety: The RS rating is a risk indicator. It’s computed from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. TSM has an excellent RS rating of 1.43.
  • Fair Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s calculated day over day, week over week, quarter over quarter, and year over year. The RT rating of 0.94 for TSM is below the average but deemed fair nonetheless. 

The overall VST rating of 1.21 is good for TSM, but not enough to earn the stock a buy. It’s currently rated a HOLD in the VectorVest system. That being said, you can take advantage of this free stock analysis for deeper insights and transform your trading strategy for the better!

TSMC Saw 45% Revenue Growth in July, On Track for Q3 Forecast: It’s Not Time to Buy TSM, Though

Want These Types of Insights at Your Fingertips so You Can Win More Trades?

Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. TSM saw 45% sales growth for the month of July, and the stock has gained 8% in the past week alone while other companies in the segment fell. It has very good upside potential and excellent safety with fair timing.

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