Expectations pulverized
Taiwan Semi is a true indicator for the semiconductor industry, which is why I have already reported on it many times in the past and commented positively on the company.
The last time was just three months ago, when the share underwent another major correction:
Trotz Zöllen, trotz Sorgen: Taiwan Semi übertrifft alle Erwartungen
Since then, the share price has risen from USD 148 to USD 245. So today we are taking a closer look at how likely it is that the rally will continue, or whether this could be the end of the line.
Yesterday, the company again presented very strong Quartalszahlen results.
Sales increased by 44% over the year to USD 30.7 billion. At the same time, the gross margin improved from 53.2 % to 58.6 %, the operating margin from 42.5 % to 49.6 % and the net margin from 36.8 % to 42.7 %.
At NT$ 398.3 billion, profit was well above expectations of NT$ 376. Converted, this corresponds to a profit of USD 13.5 billion or USD 2.47 per share and a 61% jump in profits.
Forecast raised...
In addition, the forecast for sales growth has been raised from a "mid-20% range" to 30%.
This is no great surprise, as I had already anticipated this in an earlier analysis:
Forecasters currently expect sales growth of 21% in the current financial year. I am somewhat more optimistic, as I do not see any tangible reasons why the momentum should slow down to this extent.
I expressed a similar view on earnings in my last analysis:
Consensus estimates currently call for a 31% jump in earnings to USD 9.02 per share. After a jump in profits of over 50% in the first quarter and in view of the forecast for Q2, there is a good chance that the consensus estimates are too low.
The consensus estimates now call for a 43% jump in earnings to USD 9.88 per share. The forecasters have therefore had to make significant improvements.
Taiwan Semi therefore has a forward P/E of 24.9.
...and still too low?
For a company with such a market position and growth rates, this is justifiable. The only fly in the ointment is that the valuation is now well above the long-term average of 20.
In absolute terms, there is further upside potential, but not in relative terms.
The question of whether the share price will be higher in six months' time will probably depend primarily on whether expectations can be exceeded once again - and on the political environment.
The results in the first two quarters suggest that the consensus estimates are still too low. After all, a 61% jump in profits was achieved in the first half of the year.
Taiwan Semi share: chart from 18.07.2025, price: USD 245 - symbol: TSM | Source: TWS
With the breakout above the previous all-time high, a Kaufsignal with extrapolated price targets of USD 259 and USD 292 was triggered.
However, if the share falls below USD 226, a correction towards USD 206 or USD 193 must be expected
Source: