With the release of financial reports by various technology companies, there have been changes in the rankings of the seven giants that led the surge in US stocks last year. Microsoft, benefiting from the AI trend, surpassed Apple to take the top spot in market value, while Tesla’s stock price plummeted due to disappointing earnings and forecasts. Taiwan’s national treasure, TSMC, has a bright outlook, not only driving the semiconductor sector to new heights but also surpassing Tesla in market value. Could it be that there will be a change in the seven giants?
Source: CNBC, Date: January 26, 2024
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Due to geopolitical risks, TSMC has expanded overseas in recent years, including the US and Japan, resulting in a significant increase in capital expenditure. The higher costs of overseas labor and other factors have raised doubts as to whether it can maintain high gross margins.
However, TSMC completely dispelled these doubts at the conference on January 18th. Not only did it achieve an impressive gross margin of 53% in the fourth quarter, but it also achieved an operating net profit margin of 41.6% and a net profit margin after taxes of 38.2%. Its EPS for the full year also reached 32.34 yuan.
CEO Wei Zhejia is optimistic about the overall semiconductor industry’s output value, which is expected to increase by 10% this year (excluding memory). Foundry production is expected to increase by 20%. TSMC’s US dollar revenue growth is expected to exceed 20% driven by AI and HPC demand.
After the conference, TSMC’s stock price jumped above 600 yuan the next day and continued to rise. It closed at 644 yuan today, less than 5% below the high of 672 yuan in January 2022. Its market value also surpassed Tesla in one fell swoop. Is Taiwan’s national treasure about to join the ranks of the seven giants?
ADR (stock code TSM), issued by TSMC in the US, reached as high as $116.56, which, when calculated at an exchange rate of 31.3, reflects that the stock price in Taiwan has long exceeded 729 yuan.
What is ADR? How is the price converted? Please see:
Ark Continues to Be Optimistic About the AI Industry, Buys Taiwan’s National Treasure TSMC ADR (TSM)
After the disappointing earnings announcement, Tesla’s stock price plunged by 12% to $182. It has already fallen by 27% year-to-date. While other tech giants are breaking new highs, it is the only one among the seven giants that has experienced a dismal decline.
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Tesla’s Q4 Earnings Disappoint, 2024 Outlook Bleak, Stock Price Falls Below $200
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However, Ark’s “Queen of Stocks” Cathie Wood is still supporting Tesla with action. Ark’s ARKK and ARKW bought 177,870 shares of Tesla yesterday, worth about $32.9 million.
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Ark’s Cathie Wood Still Bullish on AI Industry, Calls Tesla to $2,000 by 2027
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Further Reading:
Tesla’s Q4 Deliveries Reach a New High, but Unfavorable Year for Stock Prices?
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