The Reshuffling of Seven Giants in the US Stock Market: TSMC’s Market Value Surpasses Tesla
With the release of financial reports from various technology companies, there have been changes in the rankings of the seven giants that led the surge in the US stock market last year. Microsoft, benefiting from the AI trend, surpassed Apple to take the top spot in market value. Meanwhile, Tesla’s stock price declined due to disappointing earnings and forecasts, while Taiwan’s semiconductor giant TSMC has shown promising prospects, driving the semiconductor sector to new heights and surpassing Tesla in market value. Could it be that there will be a change in the ranking of the seven giants?
Source: CNBC, Compiled on January 26, 2024
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TSMC’s Strong Investor Conference, Surpassing Tesla in Market Value
Tesla’s Year of Contrary Decline, But Ark Still Supports Buying
Due to geopolitical risks, TSMC has been aggressively expanding overseas to countries such as the United States and Japan in recent years, resulting in a significant increase in capital expenditures. The higher costs of overseas labor and other factors have raised concerns about whether TSMC can maintain its high gross margin.
However, TSMC thoroughly dispelled these doubts at its investor conference on January 18. Not only did it achieve an impressive gross margin of 53% in the fourth quarter, but it also achieved operating profit margin of 41.6%, after-tax net profit margin of 38.2%, and an impressive full-year EPS of 32.34 yuan.
CEO Wei Zhao-chia also has a positive outlook on the overall semiconductor industry this year, expecting a 10% annual increase in output value (excluding memory) and a 20% annual increase in wafer foundry. It is estimated that TSMC’s USD revenue growth rate will exceed 20% driven by demand in AI and HPC.
Following the investor conference (which took place after the Taiwan stock market closed), TSMC’s stock price jumped above 600 yuan the next day and continued to rise. It closed at 644 yuan today, less than 5% away from its January 2022 high of 672 yuan. Its market value has also surpassed Tesla’s. Could Taiwan’s semiconductor giant be among the seven giants?
Furthermore, TSMC’s ADR (stock code TSM) listed in the United States has reached as high as $116.56, which, when calculated with an exchange rate of 31.3, reflects a stock price on the Taiwan Stock Exchange of 729 yuan.
What is ADR? How is the price converted? Please see:
Ark Continues to Be Bullish on the AI Industry, Buying TSMC ADR (TSM)
On the other hand, Tesla’s stock price plunged 12% to $182 after disappointing earnings were announced, and it has already fallen 27% this year. While other technology giants continue to hit new highs, it is the only one among the seven giants that suffered a significant decline.
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Tesla’s Q4 Earnings Disappointing, Poor Outlook for 2024, Stock Price Falls Below $200
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However, Cathie Wood, the “queen of stocks” at Ark, still supports Tesla. Ark’s funds, ARKK and ARKW, purchased 177,870 shares of Tesla worth approximately $32.9 million yesterday.
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Cathie Wood Bullish on AI Industry, Calls for Tesla to Reach $2,000 by 2027
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Further Reading
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