Latest news with #EarningsESP
Yahoo
13 hours ago
- Business
- Yahoo
ASML Likely to Beat Q2 Earnings Estimates: How to Play the Stock?
ASML Holding N.V. ASML may beat expectations when it reports second-quarter 2025 results before the market opens on July 16. ASML expects revenues between €7.2 billion and €7.7 billion. The Zacks Consensus Estimate is pegged at $8.55 billion, indicating an increase of 27.2% from the year-ago quarter's level. The Zacks Consensus Estimate for earnings is pegged at $5.94 per share, up 37.5% from the year-ago quarter's earnings of $4.32. The estimate has been revised upward by 14 cents over the past 30 days. Image Source: Zacks Investment Research ASML Holding has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6.8%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) ASML Holding N.V. price-eps-surprise | ASML Holding N.V. Quote Our proven model predicts an earnings beat for ASML Holding this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($6.11 per share) and the Zacks Consensus Estimate ($5.94 per share), is +2.82%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Zacks Rank: ASML carries a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here. The semiconductor sector is riding on a wave of resurgence, fueled by surging demand and the transformative potential of artificial intelligence (AI). This positive momentum has been a boon for companies like ASML, particularly in the wafer fabrication equipment space. ASML Holding has been at the forefront of technological innovation, benefiting significantly from the industry's shift toward smaller, more advanced technology nodes. These nodes are essential for building cutting-edge digital infrastructures that support AI, 5G and high-performance computing. The increasing complexity of chip designs has made ASML's state-of-the-art lithography tools indispensable to chipmakers. In both logic and memory markets, the demand for ASML's lithography tools continues to climb. The ongoing transition to next-generation memory technologies, such as DDR5 and high-bandwidth memory (HBM), is a tailwind for the company. With DRAM manufacturers ramping up technology upgrades, ASML Holding is likely to have witnessed strong momentum in the second quarter, driven by heightened memory demand. ASML's heavy investments in Extreme Ultraviolet ('EUV') technology are also paying off. EUV lithography is critical for producing advanced chips, and the company's service segment is benefiting from the rising demand for EUV-related services. In particular, the growing popularity of the NXE:3800 low numerical aperture (NA) machine, which can process 220 wafers per hour, is likely to have driven substantial EUV sales in the to-be-reported quarter. Despite the strengths, macroeconomic challenges are likely to have negatively impacted ASML's quarterly outlook. Intensifying U.S.-China trade tensions, coupled with export restrictions on advanced semiconductors and equipment to China, remain a critical headwind. Given ASML's exposure to the Chinese market, these restrictions may have dampened the company's overall performance. Nonetheless, strong demand for Deep Ultraviolet ('DUV') lithography systems, which Chinese chipmakers use to manufacture mature-node chips, such as those based on the 28nm process, might have partially offset the negative impact of export restrictions on advanced semiconductor tools to China. ASML Holding shares have soared 15.7% year to date (YTD), outperforming the Zacks Computer and Technology sector's rise of 7.4%. Comparing ASML with semiconductor peers, the stock has underperformed KLA Corporation KLAC, Lam Research Corporation LRCX and Applied Materials, Inc. AMAT. YTD, shares of KLA Corporation, Lam Research and Applied Materials have jumped 46.7%, 40.8% and 21.7%, respectively. Image Source: Zacks Investment Research Now, let's look at the value that ASML offers to its investors at the current level. Currently, ASML Holding is trading at a premium. With a forward 12-month P/E of 27.7X, ASML is trading marginally higher than the sector's average of 27.39X. Image Source: Zacks Investment Research The stock trades at a premium to Lam Research and Applied Materials, while at a discount to KLA Corporation. Currently, KLA Corporation, Lam Research and Applied Materials have a forward 12-month P/E ratio of 27.76, 25.34 and 20.11, respectively. ASML Holding has a clear advantage in the chip equipment market. It is the only company capable of producing EUV lithography machines at scale. These machines are needed to make chips at 5nm, 3nm and soon 2nm levels — key to powering AI processors, mobile devices and data centers. The company is already rolling out its next-generation High-NA EUV machines, which will be used for even smaller chips. As demand for faster and more efficient chips rises, especially with the growth of AI, ASML Holding stands to benefit. Its machines are a necessary part of the chip supply chain, and its customers, including TSMC, Intel and Samsung, will rely on ASML's technology for years to come. However, one concern is the company's exposure to China. In 2024, China made up 41% of ASML's shipments, which decreased to 27% in the first quarter of 2025. U.S. pressure on the Dutch government has led to export restrictions on some of ASML's most advanced equipment, which could limit future sales in that market. Still, strong demand from other regions may offset that risk. ASML Holding's dominance in EUV and High-NA EUV technology, along with solid revenue visibility, makes it well-positioned for future growth. With rising demand for advanced nodes, AI chips and high-bandwidth memory, ASML's lithography tools will remain mission-critical. However, export restrictions on advanced semiconductors and equipment to China and a high valuation multiple warrant a cautious approach to the stock. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KLA Corporation (KLAC) : Free Stock Analysis Report ASML Holding N.V. (ASML) : Free Stock Analysis Report Lam Research Corporation (LRCX) : Free Stock Analysis Report Applied Materials, Inc. (AMAT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
MSCI (MSCI) Earnings Expected to Grow: Should You Buy?
The market expects MSCI (MSCI) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The earnings report, which is expected to be released on July 22, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. While the sustainability of the immediate price change and future earnings expectations will mostly depend on management's discussion of business conditions on the earnings call, it's worth handicapping the probability of a positive EPS surprise. This maker of software tools to help portfolio managers make investment decisions is expected to post quarterly earnings of $4.14 per share in its upcoming report, which represents a year-over-year change of +13.7%. Revenues are expected to be $769.86 million, up 8.7% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1.65% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For MSCI, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.06%. On the other hand, the stock currently carries a Zacks Rank of #2. So, this combination indicates that MSCI will most likely beat the consensus EPS estimate. While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that MSCI would post earnings of $3.87 per share when it actually produced earnings of $4.00, delivering a surprise of +3.36%. Over the last four quarters, the company has beaten consensus EPS estimates four times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. MSCI appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Among the stocks in the Zacks Financial - Investment Management industry, MSCI (MSCI), is soon expected to post earnings of $4.14 per share for the quarter ended June 2025. This estimate indicates a year-over-year change of +13.7%. This quarter's revenue is expected to be $769.86 million, up 8.7% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for MSCI has been revised 1.6% up to the current level. Nevertheless, the company now has an Earnings ESP of +0.06%, reflecting a higher Most Accurate Estimate. When combined with a Zacks Rank of #2 (Buy), this Earnings ESP indicates that MSCI will most likely beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MSCI Inc (MSCI) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Analysts Estimate Preferred Bank (PFBC) to Report a Decline in Earnings: What to Look Out for
Preferred Bank (PFBC) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 21. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This independent commercial bank is expected to post quarterly earnings of $2.43 per share in its upcoming report, which represents a year-over-year change of -2%. Revenues are expected to be $70.15 million, up 0.9% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 1.93% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Preferred Bank, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -1.03%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination makes it difficult to conclusively predict that Preferred Bank will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Preferred Bank would post earnings of $2.33 per share when it actually produced earnings of $2.23, delivering a surprise of -4.29%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Preferred Bank doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Another stock from the Zacks Banks - West industry, Plumas Bancorp (PLBC), is soon expected to post earnings of $1.53 per share for the quarter ended June 2025. This estimate indicates a year-over-year change of +34.2%. Revenues for the quarter are expected to be $20.95 million, up 1.7% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Plumas Bancorp has been revised 24.7% down to the current level. Nevertheless, the company now has an Earnings ESP of +22.22%, reflecting a higher Most Accurate Estimate. This Earnings ESP, combined with its Zacks Rank #3 (Hold), suggests that Plumas Bancorp will most likely beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Preferred Bank (PFBC) : Free Stock Analysis Report Plumas Bancorp (PLBC) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
2 days ago
- Business
- Yahoo
Wintrust Financial (WTFC) Earnings Expected to Grow: Should You Buy?
Wintrust Financial (WTFC) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on July 21. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This bank holding company is expected to post quarterly earnings of $2.59 per share in its upcoming report, which represents a year-over-year change of +11.6%. Revenues are expected to be $655.9 million, up 10.8% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.23% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Wintrust, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +0.19%. On the other hand, the stock currently carries a Zacks Rank of #3. So, this combination indicates that Wintrust will most likely beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Wintrust would post earnings of $2.52 per share when it actually produced earnings of $2.69, delivering a surprise of +6.75%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Wintrust appears a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Among the stocks in the Zacks Banks - Midwest industry, Huntington Bancshares (HBAN), is soon expected to post earnings of $0.34 per share for the quarter ended June 2025. This estimate indicates a year-over-year change of +13.3%. This quarter's revenue is expected to be $1.99 billion, up 9.6% from the year-ago quarter. Over the last 30 days, the consensus EPS estimate for Huntington Bancshares has been revised 0.4% up to the current level. Nevertheless, the company now has an Earnings ESP of -2.42%, reflecting a lower Most Accurate Estimate. When combined with a Zacks Rank of #3 (Hold), this Earnings ESP makes it difficult to conclusively predict that Huntington Bancshares will beat the consensus EPS estimate. The company beat consensus EPS estimates in each of the trailing four quarters. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Wintrust Financial Corporation (WTFC) : Free Stock Analysis Report Huntington Bancshares Incorporated (HBAN) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Globe and Mail
2 days ago
- Business
- Globe and Mail
TSM Likely to Beat Q2 Earnings Estimates: Buy, Hold or Sell the Stock?
Taiwan Semiconductor Manufacturing Company Ltd. TSM is likely to beat expectations when it reports second-quarter 2025 results before the market opens on July 17. The Zacks Consensus Estimate for second-quarter earnings is pegged at $2.37 per share, implying a 60.1% increase from the year-ago quarter's reported number. The estimate has been revised 3 cents upward over the past seven days. Taiwan Semiconductor expects revenues between $28.4 billion and $29.2 billion. The Zacks Consensus Estimate is pegged at $30.04 billion, indicating a rise of 44.3% from the year-ago quarter's reported actuals. Taiwan Semiconductor has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 6.9%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Taiwan Semiconductor Manufacturing Company Ltd. Price and EPS Surprise Taiwan Semiconductor Manufacturing Company Ltd. price-eps-surprise | Taiwan Semiconductor Manufacturing Company Ltd. Quote Earnings Whispers for Taiwan Semiconductor Our proven model predicts an earnings beat for TSM this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here. Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate ($2.45 per share) and the Zacks Consensus Estimate ($2.37 per share), is +3.25%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter. Zacks Rank: Taiwan Semiconductor carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here. Factors to Consider Ahead of TSM's Q2 Results Taiwan Semiconductor continues to assert its dominance in the semiconductor space, benefiting from a robust industry rebound fueled by the growing prominence of artificial intelligence (AI). The surge in AI-driven applications (in manufacturing and end products) has been a significant catalyst for chipset manufacturers like TSM. The rise of data-centric technologies, especially cloud computing, the Internet of Things (IoT) and the metaverse, has increased the demand for semiconductors, contributing to the company's business performance in the to-be-reported quarter. Taiwan Semiconductor's consistent investments in next-generation and specialty technologies are likely to have driven growth in the second quarter. Its leadership in 7nm and 3nm chip technologies has been instrumental, offering advanced capabilities to customers in high-demand industries. The 5nm process technology has also contributed to TSM's wafer revenues, reflecting the solid market adoption of these smaller, more efficient chipsets. Taiwan Semiconductor's strategic focus on ramping up 3nm production while advancing its 2nm development positions it for continued leadership in the semiconductor space. Taiwan Semiconductor's expansion into high-performance computing (HPC) and smartphone sectors is expected to have bolstered its performance in the to-be-reported quarter. The company's innovative 3nm Fin Field-Effect Transistor (FinFET) technology, alongside its range of FinFET options (spanning 4nm, 5nm, 6nm and 7nm nodes), has become a key growth driver, particularly in HPC applications. TSM's advanced FinFET technologies, such as the enhanced 3nm and plus variants of the 4nm and 5nm chips, have helped it maintain strong momentum in the smartphone market. Taiwan Semiconductor's technological advancements are anticipated to have supported its expansion into automotive, IoT and digital consumer electronics. The adoption of TSM's multi-project wafer processing service, which helps customers cut costs, is likely to have boosted the company's top-line growth. This diversification across industries enhances TSM's resilience and offers multiple revenue streams. However, rising operational costs, especially from its overseas expansion into Arizona, Japan and Germany, are likely to have hurt Taiwan Semiconductor's gross margin in the to-be-reported quarter. Also, higher electricity prices in Taiwan are anticipated to have negatively hurt its profitability in the second quarter. TSM Stock Price Performance & Valuation Taiwan Semiconductor shares have appreciated 16.7% year to date (YTD), outperforming the Zacks Computer and Technology sector's rise of 7.4%. However, compared to other major players in the semiconductor space, TSM stock has underperformed NVIDIA NVDA, Advanced Micro Devices AMD and Broadcom AVGO. YTD, shares of NVIDIA, Advanced Micro Devices and Broadcom have soared 22.8%, 21.2% and 18.3%, respectively. YTD Price Return Performance Image Source: Zacks Investment Research Now, let's look at the value that Taiwan Semiconductor offers to its investors at the current levels. Currently, TSM is trading at a discount, with a forward 12-month P/E of 22.48X compared with the sector's 27.39X. TSM Forward 12-Month P/E Ratio Taiwan Semiconductor also trades at a lower P/E multiple compared with NVIDIA's 34.04X, Advanced Micro Devices' 30.83X and Broadcom's 35.29X. Investment Thesis for TSM Stock Taiwan Semiconductor sits at the center of the artificial intelligence (AI) revolution. As the world's largest contract chipmaker, TSMC supplies cutting-edge chips to companies like NVIDIA, Advanced Micro Devices and Intel, all of which depend on TSMC's ability to manufacture at advanced nodes. In 2024, AI-related revenues tripled, making up a mid-teen percentage of Taiwan Semiconductor's total revenues, and the momentum is far from over. The company expects AI-related sales to double again in 2025, with an impressive 40% compound annual growth rate over the next five years. This positions TSMC as the undisputed backbone of AI-driven technological advancements. Taiwan Semiconductor is not only growing but also scaling at an unprecedented pace to capitalize on the AI-driven growing demand for advanced chips. The company is set to invest between $38 billion and $42 billion in capital expenditures in 2025, far outpacing its $29.8 billion investment in 2024. The bulk of this spending, around 70%, is focused on advanced manufacturing processes, ensuring TSM stays ahead of the curve. Taiwan Semiconductor's sustained focus on investing in growth opportunities is likely to continue boosting its top and bottom lines. Conclusion: Buy TSM Stock for Now Taiwan Semiconductor remains a critical player in global chipmaking. Its dominance in advanced nodes, rising AI-related demand and aggressive investment in capacity position it well for the next decade. With an earnings beat likely in the second quarter and a valuation that still offers upside, now is the perfect time to buy TSM stock. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include Stock #1: A Disruptive Force with Notable Growth and Resilience Stock #2: Bullish Signs Signaling to Buy the Dip Stock #3: One of the Most Compelling Investments in the Market Stock #4: Leader In a Red-Hot Industry Poised for Growth Stock #5: Modern Omni-Channel Platform Coiled to Spring Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%. Download Atomic Opportunity: Nuclear Energy's Comeback free today. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. NVIDIA Corporation (NVDA): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report
