Taiwan Semiconductor Manufacturing is Friday's IBD Stock Of The Day as the contract chipmaker hits a buy point following its April sales report. Major fabless chipmakers saw their shares rise along with TSM stock.
Taiwan Semiconductor, better known as TSMC, said Friday that its revenue in April rose 20.9% from March and 59.6% from the same month last year. Year to date through April, TSMC's sales are up 26.2%.
TSMC is the world's largest chip foundry. Its many customers include Apple, Nvidia, AMD, Qualcomm and Broadcom.
Investors responded positively to TSMC's April sales report.
TSM Stock Breaks Out After Report
In morning trades on the stock market today, TSM stock broke out of a double-bottom base at a buy point of 148.43, according to IBD MarketSurge charts. It climbed as high as 150.50 in intraday trading. TSM stock rose 4.5% to close at 149.26. The buy range goes to 155.85.
The TSMC sales report provided a lift for its customers. Among those fabless chipmakers rising on the news were Nvidia, Qualcomm and Broadcom.
Wedbush Securities analyst Matt Bryson said the April sales data puts TSMC on pace to beat consensus estimates for the second quarter. He reiterated his outperform, or buy, rating on TSM stock.
"We would attribute the better-than-forecast results to multiple tailwinds," Bryson said in a client note. Those tailwinds include strong demand for high-performance computing and artificial intelligence chips. TSMC also is seeing a pickup in standard server chips and stable demand for Apple iPhone chips, he said.
On April 18, Taiwan Semiconductor beat expectations for the first quarter but offered cautious guidance. TSM stock fell 4.9% on the news that day.
Ranks No. 1 In Industry Group
Taiwan Semiconductor ranks first out of 33 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. It holds an IBD Composite Rating of 91 out of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
TSM stock is on two IBD lists: Leaderboard and Tech Leaders.
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