Taiwan Semiconductor's Robust Earnings, Capex Outlook Boost ASML, Applied Materials, And Other Stocks: Retail Turns Extremely Bullish

Shares of ASML Holding NV (ASML), Applied Materials Inc. (AMAT), KLA Corp. (KLAC), and other related stocks surged in Thursday’s mid-day trade after the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co. (TSM) posted robust earnings.

ASML, AMAT, and KLAC’s shares gained between 6% to 7% in mid-day trade on Thursday. TSMC’s U.S.-listed shares, too, gained more than 5% after paring some of its gains since the markets opened.

TSMC reported robust earnings during the fourth quarter with net income of $11.38 billion, edging past the $11.29 billion forecast, according to Koyfin.

TSMC’s earnings per share (EPS) came in at $2.24, ahead of Wall Street estimates of $2.20.

However, driving the upsurge of semiconductor equipment stocks is TSMC’s strong revenue forecast and capital expenditure outlook.

The chip manufacturer projects its capex for 2025 to be between $38 billion and $42 billion.

Of this, it expects 10% to 20% of its capex to go toward advanced packaging and related areas, compared to nearly 10% in 2024. ASML, a key maker of lithography equipment, is expected to benefit from this increase.

Retail sentiment on Stocktwits for the TSM stock entered the ‘extremely bullish’ (92/100) territory, rising from ‘bullish’ (71/100) a day ago.

TSM sentiment and message volume January 16, 2025, as of 11:30 am ET | Source: Stocktwits

Sentiment for other semiconductor equipment makers also entered the ‘extremely bullish’ territory.

ASML sentiment and message volume January 16, 2025, as of 11:30 am ET | Source: Stocktwits AMAT sentiment and message volume January 16, 2025, as of 11:30 am ET | Source: Stocktwits KLAC sentiment and message volume January 16, 2025, as of 11:30 am ET | Source: Stocktwits

TSMC’s share price has surged more than 16% in the past six months. In contrast, ASML’s share price has fallen by over 28% during this period.

AMAT stock has fallen over 22% in this time, while KLAC’s shares have fallen over 11%.

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