- Summary:
- The AI chips market is still strong, but focus will likely shift towards utility beyond generative AI. How will it impact TSCM stock price?
Taiwan Semiconductor Manufacturing (TSCM) stock price stayed up in the pre-market session on Friday, trading at $203.11 at the time of writing after gaining 0.76%. A second successive gain in the first two days of trading in the new year signals upbeat investor sentiment around the chip maker and the wider AI industry.
TSCM might struggle to replicate 2024 exploits
TSCM stock price rose by 100% in 2024, thanks to strong tailwinds from the AI hype. However, the company will need a new dimension in the industry to sustain the upside. The demand for AI chips could slow down in the coming months if the tech industry fails to demonstrate scalable utility beyond generative AI.
However, the medium-term demand for TSCM products is likely to stay stable, thanks to a strong order book comprising of tech giants like Apple, Nvidia, AMD, Broadcom and Qualcomm. TSCM (NYSE: TSCM) reported revenues of $23.5 billion in its last quarterly release, representing a 36% year-over-year growth. Also, the company gave revenue guidance of $26.1 billion to $26.9 billion in the fourth quarter, which would translate to 35% YoY increase.
The downside to TSCM’s revenue boom is that it might become a victim of its own success. NVIDIA stock price has already shown us the cost of such success, with its share price growing marginally since October 2024. Therefore, TSCM stock price trajectory will depend not only on its ability to meet revenue projections, but also the growth in profit margins.
TSCM stock price prediction
The momentum on TSCM stock signals bullish control with the pivot at $201.50. That will likely see the establishment of the first resistance at $203.50. However, an extended control by the buyers could break above that level and test $205.00.
Conversely, the sellers will be in control if the price moves below $201.50. The momentum will likely create the first support at $199.55. Breaking below that level will invalidate the upside narrative. Also, a stronger downward momentum could extend losses to and take TSCM to the second support at $197.80.
