A veteran investor connects with Taiwan Semiconductor after the sale

This has nothing to do with the car.

Duesenberg Automobile & Motors Co. was an American racing and luxury car manufacturer founded in Indianapolis in 1920.

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The company is known for popularizing the inline-eight engine and four-wheel hydraulic brakes, and Duesenberg made the first American car to win a Grand Prix race.

People would often refer to a Duesenberg vehicle as “a doozy”, but the car’s nickname is not related to the word meaning “extraordinary”, “exceptional” or “unique”.

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That the doozy had played its part in the vernacular years before the Duesenbergs hit the road.

And that’s the definition TheStreet Pro’s Chris Versace used in his recent column, “TSM’s Quarterly Sales Bonanza Boosts Outlook for Several Portfolio Stocks.”

“Taiwan Semiconductor’s September sales landed this morning, and boy was the report a stunner,” he said.

Shares of TSCM are up over the past year

“Sales for the month were up just over 40% year-on-year, taking the company’s end-September sales up a staggering 39% year-on-year and up just over 6% quarter-on-quarter precedent,” added Versace.

TSM manufactures state-of-the-art semiconductors for such tech superstars as Nvidia, Apple, Advanced Micro Devices (AMD) and Marvell.

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While the company doesn’t provide any end-market color in these monthly earnings reports, Versace said, judging by recent comments from Nvidia (NVDA) With CEO Jensen Huang saying demand for AI chips is “crazy” and Hon Hai President Young Liu saying demand is “crazy,” “we can infer that revenue from TSM’s high-performance computing segment has been robust.”

The HPC segment is important because it’s home to TSM’s AI and data center chip revenue, and Versace says the current quarter is shaping up very well, not only for Nvidia but also for Marvell. (MRVL) also.

Versace wrote about Hon Hai in a previous column, saying the company’s September revenue was up nearly 34% sequentially and more than 10% from a year earlier.

“The company said it saw continued strong demand for AI servers, which pushed the cloud and networking product segment forward, while new product launches for the smart consumer electronics segment led to strong sequential growth” , he said.

Taiwan Semiconductor (TSM) shares are up nearly 79% year-to-date and have doubled (up 109%) from a year ago.

Research firm TrendForce estimated the company’s share of global foundry revenue this year would be about 64 percent, up from 51 percent in 2019, The Wall Street Journal reported.

MediaTek, the world’s leading smartphone chip developer, said on October 9 that its new 5G mobile chipset, the Dimensity 9400, is made with Taiwan Semi’s state-of-the-art 3-nanometer process technology, which Apple. (AAPL) uses artificial intelligence for its iPhone 16 series, according to Nikkei Asia.

The chip sector has been posting some impressive numbers lately.

Global semiconductor sales reached $53.1 billion in August, the Semiconductor Industry Association said, up 20.6 percent from a year earlier and up 3.5 percent from July.

“The global semiconductor market continued to grow substantially in August, achieving the highest August sales total ever recorded, and month-over-month sales increased for the fifth consecutive month,” said John Neuffer, president and CEO of SIA. a statement.

TheStreet Pro is eagerly awaiting TSCM’s earnings report

“Year-over-year sales increased by the largest percentage since April 2022, driven by a 43.9% year-over-year sales increase in the Americas, and month-over-month sales increased in all regions for the first time since October. 2023,” he said.

Versace said the next potential catalyst for Nvidia and Marvell shares would be AMD’s “Advancing AI” event, which began on October 10.

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“We will be looking for comments from (AMD) CEO Lisa Su to back up color comments from Nvidia’s Jensen and Hon Hai’s Liu,” he said. “If Su’s comments don’t match that level of enthusiasm, it could reinforce the view that Nvidia is way ahead of AMD.”

Su delivered the keynote address at the event, according to IT Pro, and said that AMD is “truly committed” to driving open innovation in high-performance computing and AI infrastructure.

“When TSM reports its quarterly results next week, we’ll get more color on the breakdown of its end market, including how strong HPC was in the three months compared to year-ago levels,” Versace said. “This may give us reason to revise our NVDA price target, which currently stands at $155.”

The quarterly deep dive will also provide color in the smartphone market, he added. This is TSMC’s second largest market behind high-performance computers.

“This, along with his comments on the conference call about the smartphone and PC markets, will be the next known catalyst for our Qualcomm stock. (QCOM) Universal display (OLED) and Apple,” Versace said.

With this report in hand, he added “we reiterate our One ratings on shares of NVDA, MRVL, QCOM and OLED.”

“We continue to believe that the gradual rollout of Apple Intelligence will lead to an extended iPhone upgrade cycle, keeping us bullish on AAPL stock over the medium to long term,” Versace said.

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