Retail Investors Back TSM’s 30% Revenue Growth Ambitions – Some Expect Bigger Gains

Taiwan Semiconductor Manufacturing Company’s (TSM) bold revenue growth forecast has struck a chord with retail investors, with nearly seven in ten respondents on Stocktwits expressing confidence in the company’s ability to deliver.

The bullish retail sentiment comes after the company's quarterly sales topped estimates with record fourth-quarter revenue of $26.36 billion, a 38.8% year-on-year increase.

This brought its 2024 revenue growth to 34%, surpassing its official target of a 30% annual increase. 

The world’s largest maker of advanced chips has been one of the biggest beneficiaries of a global race to develop artificial intelligence with customers that include Nvidia Corp. (NVDA) and Microsoft Corp. (MSFT).

Despite TSMC’s market value more than doubling over the past year to around $1.1 trillion, concerns remain among some investors about the sustainability of AI-driven growth.

15% of investors adopted a neutral stance, suggesting that while growth may be steady, it is unlikely to meet the ambitious 30% target. 

Meanwhile, 16% of respondents were bearish, citing challenges that could undermine TSM’s growth trajectory. 

Key concerns on the Street include geopolitical tensions between the U.S. and China, which could disrupt supply chains.

However, the stock gained 2.66% during Wednesday’s session despite a Bloomberg report indicating that more chip export restrictions, specifically targeted at TSMC, may be on the way before President Joe Biden’s term in office ends.

Some users forecast that revenue growth could be even higher if the buzz around artificial intelligence (AI) maintains momentum. 

One user warned that while 30% revenue growth is certainly possible, there could also be a decline if TSMC’s production facilities in China are impacted by the trade war shaping up between China and President-elect Donald Trump. 

On Stocktwits, retail sentiment around TSMC’s stock had improved to ‘extremely bullish’ from ‘bullish’ a day. Message volume also spiked to ‘extremely high’ levels as investors anticipate an optimistic earnings call on Thursday. 

TSM’s stock has an average price target of $242.17, with over 45 out of 47 analysts giving the shares a 'Buy'-equivalent rating, according to FactSet.

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