US-listed shares of Taiwan Semiconductor Manufacturing Company (TSM) rose 9.6% in premarket trading, putting the stock in position for a record high after third-quarter earnings beat analysts’ expectations. TSMC posted a 54% increase in profit and raised its full-year revenue outlook.
TSMC produces chips for Nvidia (NVDA) and its rival Advanced Micro Devices (AMD), as well as Broadcom (AVGO) and many other technology companies. Nvidia shares rose 3%, AMD rose 2.7% and Broadcom rose 2.8% premarket on the news.
Here’s a look at TSMC’s results:
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Adjusted earnings per share of NT$12.54 ($0.39) vs. NT$11.55 ($0.36) expected
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Sales of 759.7 billion new Taiwan dollars ($23.5 billion) versus NT$751.1 billion ($23.3 billion) expected
The rally in chip stocks is partially reversing the sector’s losses earlier this week, driven by fears of possible further US trade restrictions and a downbeat report from semiconductor equipment maker ASML.
Analysts from Needham, Bernstein, Barclays and other investment firms reiterated their buy ratings on TSM stock Thursday morning. Of the Wall Street analysts covered by Bloomberg who cover the company, about 23 recommend buying the stock, while only one analyst has a Hold rating.
Analysts see the shares rising to about $217 each on average over the next 12 months, according to Bloomberg data.
