According to Morgan Stanley's report, Taiwan Semiconductor (TSM.US) will disclose its performance for fiscal Q2 of 2024 on July 18. The bank expects the company to raise its Q3 revenue growth guidance to 13% QoQ and gross margin range to almost the same level as Q2 (median 52%).

With steady demand for artificial intelligence (AI), the bank believes that Taiwan Semiconductor will raise its full-year revenue growth guidance to the middle range of 20% YoY, compared to the original guidance of low-to-middle range at 20%. As for capital expenditures for the full year, assuming that the company obtains discounts on equipment procurement, the bank expects its capital expenditure guidance to be updated to between $30 billion and $32 billion USD, compared to the original guidance of between $28 billion and $32 billion USD.

The bank believes that Taiwan Semiconductor's Q2 performance and guidance will meet market expectations, having a positive impact on its wafer pricing. The bank also sees strong demand for its SoIC 3D technology (which will be adopted by Apple (AAPL.US) in the second half of next year and Nvidia (NVDA.US) in 2028), and therefore raises its target price for Taiwan Semiconductor (02330.TW) from NT$1,080 to NT$1,180, with a rating of "shareholding".

Taiwan Semiconductor's stock price hit a new high this morning, reaching NT$1,035, up 2.99%.