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TSMC Revenue Rose
The TSMC factory in Nanjing, Jiangsu province, China (CFOTO/Getty Images)
Chipping in

TSMC climbs on blowout sales, sees AI revenues doubling this year

AI-centric sales poised to keep booming and supply remains more of a constraint than demand.

Luke Kawa

TSMC, the world’s largest semiconductor producer, is jumping 5% in the premarket after posting stronger fourth-quarter results and a better outlook than analysts anticipated, saying that AI-centric revenues are poised to double this year after tripling in 2024.

Some highlights from the quarterly report and earnings call:

  • Adjusted earnings per share of $0.45 beat expectations. 

  • Revenues of $26.8 billion were above all projections.

  • Even the low end of its guided ranges for revenues ($25 billion to $25.8 billion) and operating margins for Q1 (between 46.5% to 48.5%) exceeded the consensus estimate for these metrics.

  • TSMC plans to aggressively expand to accommodate the AI boom: full-year planned capex ranges from $38 billion to $42 billion, compared to an estimate of $35.2 billion.

    • HPC (high-performance computing) sales, some of which are tied to the AI build-out, accounted for more than half of TSMC’s fourth-quarter revenues and posted the fastest sequential growth of any segment.

    • So-called AI accelerators “accounted for close to mid-teens percent of our total revenue in 2024,” according to Chairman and CEO CC Wei, who expects these sales to double this year after tripling in 2024.

    • Demand still exceeds supply: “We have very tight capacity and cannot even meet customers’ need,” Wei said. Later, on a question on whether there was more upside/downside to the expectation that AI-centric revenues would double in 2025, he suggested it was more a matter of supply than demand.

  • There’s still a big divide between AI and ex-AI demand. Per Wei: “2024 was a mixed year of recovery for the global semiconductor industry. AI-related demand was strong while our other applications saw only a very mild recovery, as macroeconomic conditions weigh on consumer sentiment and end-market demand.” 

  • On trade and tariffs, particularly relevant to TSMC given it makes geopolitically sensitive materials and produces its most advanced products in a geopolitically fraught location:

    • “Let me assure you that we have a very frank and open communication with the current government and with the future one also,” Wei said. “I cannot say anything more than that.”

    • Export restrictions recently announced by the Biden administration are “not significant” and “manageable”  for TSMC, the CEO added.

  • American customers matter most: North America accounted 75% of sales compared to just 9% for China (a share that slipped versus Q3).

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Nike sinks to lowest level since 2014 after warning of “challenged” sales environment in Q4 report

Did Nike do it?

Investors had a mixed reaction after the global sports apparel company reported its fourth quarter earnings on Tuesday after the bell. Shares initially rose 5% as Nike beat out Wall Street expectations amid a hefty tariff refund bonus. However, the stock then sank to its lowest level since August 2014 in postmarket trading.

Here are the Q4 numbers:

  • Revenue of $11.0 billion (estimate: $10.8 billion).

  • Adjusted earnings per share of $0.20 (estimate: $0.12).

Ahead of this report, Nike warned that results would be flattered by a one-time tariff refund (now estimated at roughly $0.52 per share for the bottom line). That gave the company an extra cushion in snapping its streak of seven quarters of year-over-year profit declines.

Over the past year, the company had been punished by tariffs on imported goods, stagnant consumer spending, and increasing competition from other footwear brands like New Balance, Adidas, and Hoka.

Outgoing CFO Matthew Friend deemed it an “increasingly challenging operating environment, where sell-through remains challenged.”

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Planet Labs, AST SpaceMobile and Redwire all traded higher alongside Rocket Lab, extending gains in an industry that has drawn enhanced investor attention in recent months in light of the strategic importance that governments place on space and satellite communications infrastructure.

In a presentation, Rocket Lab’s management called the purchase “a shortcut” for its satellite communications business.

Under the terms of the agreement, Iridium shareholders will receive $27 in cash and Rocket Lab stock, valuing Iridium at $54 per share. Backed by a $3.6 billion bridge loan committed by Deutsche Bank and Wells Fargo, Rocket Lab absorbs Iridium’s globally licensed spectrum and an active base of 2.5 million subscribers.

Rocket Lab has also remained one of the most active launch providers in the sector. The company completed its 12th launch of the year last week, maintaining one of the highest launch cadences among commercial space companies.

Today's rally helps offset a brutal stretch for the group. Rocket Lab shares had fallen over 35% over the prior month, while Planet Labs stock was down more than 40% and AST SpaceMobile stock was down around 30% over the same window.

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Mike Cavanagh, the co-CEO of Comcast, will become the CEO for NBCUniversal, according to CNBC. 

The spinoff will be completed in about a year, according to a Comcast company statement. Its shareholders will also own shares in NBCUniversal, according to the same statement.

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