The firm’s monthly sales reports generally serve as a bellwether for the the global AI chip market
Shares of Taiwan Semiconductor Manufacturing Company (NYSE:TSM) traded flat to slightly down early Tuesday morning, even as the Taiwanese chipmaker reported 34% year-over-year sales growth for November.
Taiwan Semiconductor produces microprocessors for numerous technology giants, such as NVIDIA (NASDAQ:NVDA), Apple (NASDAQ:AAPL) and Advanced Micro Devices (NASDAQ:AMD).
Taiwan Semiconductor’s monthly sales reports serve as a bellwether for the global market for data center artificial intelligence (AI) chips. Released early Tuesday morning, Taiwan Semiconductor’s November data suggests that the AI chip manufacturing industry remains strong in late 2024.
Specifically, Taiwan Semiconductor’s November revenue rose 34% year over year to roughly NT$276.06 billion, which would equate to around $8.5 billion.
With that, the AI stock totaled approximately NT$2.616 trillion in sales during the first 11 months of 2024. This represents 31.8% year-over-year growth when compared to the same 11-month period from the prior year.
These revenue growth figures support CEO C. C. Wei’s remark from the company’s third-quarter 2024 earnings call that the demand for AI chips “is real” and “just the beginning”.
Moreover, for bullish investors, Taiwan Semiconductor’s revenue increase from January through November may help justify TSM stock’s near-doubling in 2024 so far.
Analysis: Taiwan Semiconductor stock refuses to budge
Given the foregoing statistics about Taiwan Semiconductor’s sales growth, it might surprise the shareholders to find that TSM stock refused to move into the green on Tuesday morning.
However, there may be a simple explanation for this. In particular, Taiwan Semiconductor’s November revenue fell 12.2% versus the chipmaker’s October revenue, which totaled around NT$314.24 billion.
In other words, Taiwan Semiconductor’s powerful revenue growth throughout the year may have prompted ultra-high expectations among the company’s shareholders. Hence, on a day-to-day basis, TSM stock traders might be unimpressed with anything less than a stellar monthly sales performance.
Furthermore, Taiwan Semiconductor’s investors are likely concerned because regulators in China recently launched an antitrust investigation targeting NVIDIA, which Taiwan Semiconductor serves as a chip supplier.
Finally, TSM stock buyers might simply be exhausted after a seemingly relentless year-to-date share-price rally. After all, even with a heavily favored tech titan like Taiwan Semiconductor, no stock can go up every single day.
