Taiwan Semiconductor Manufacturing, better known as TSMC, reported better-than-expected sales for October, thanks to demand for chips for artificial intelligence and Apple's iPhone 15. TSM stock jumped on the news Friday.
On the stock market today, TSM stock surged 6.4% higher to close at 97.44. Other semiconductor stocks followed suit.
Early Friday, TSMC released its monthly sales data, which showed a 34.8% increase in revenue in October from September. On a year-over-year basis, TSMC's October sales rose 15.7%.
The October report sets a positive tone for the company's fourth quarter, Wedbush Securities analyst Matt Bryson said in a client note. Bryson reiterated his outperform rating on TSM stock after the sales report.
"We expect a strong Q4 from TSMC," he said. "In particular, we expect that Apple seasonality and continued growth in demand for AI solutions will boost TSMC into year end, with some potential benefit from recently better handset dynamics."
TSM Stock Lifts Semiconductor Stocks
Taiwan Semiconductor is the world's largest contract chipmaker. It makes chips for top fabless chip firms such as Apple, AMD, Nvidia, Qualcomm and many more.
"Looking beyond this quarter, we continue to expect an eventual recovery in macro conditions/end markets that will be boosted by technology trends requiring an increase in semiconductor content, driving future demand growth and returning utilization rates to more optimal levels," Bryson said.
Those tech trends include AI, Internet of Things, electric vehicles, self-driving automobiles, augmented reality and virtual reality, he said.
TSM stock is one of 30 semiconductor stocks on the Philadelphia semiconductor index, known as SOX. In afternoon trading on Friday, the SOX rose 4%.
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