Intel’s $8.5B grant helps, but ‘Taiwan Semi will still lead’: Analyst

The US government has awarded Intel (INTC) up to $8.5 billion in funding for chip manufacturing through the CHIPS and Science Act. CFRA Research Senior Equity Analyst Angelo Zino joins Yahoo Finance to discuss where the grant positions Intel in the competitive landscape of semiconductors.

Though Zino acknowledges Intel’s competitive advantage as a manufacturer outside Asia, investors may need to see more for the stock to move the needle: “That 8.5 billion is going to help, but at the end of the day they will need to continue to essentially utilize all their cash flow that they’re generating from their core business into continuing to kind of build this foundry expansion initiative out there. So as we look here over the next couple of years, we do expect them to potentially be a number two our three player on the foundry side of things where Taiwan Semi (TSM) will continue to lead.”

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Taiwan Semiconductor Manufacturing Company Limited (TSM)

NYSE – Nasdaq Real Time Price. Currency in USD
140.54+1.09 (+0.78%)
At close: March 22 04:00PM EDT
140.65 +0.11 (+0.08%)
After hours: Mar 22, 07:59PM EDT
Full screen
Trade prices are not sourced from all markets
Previous Close139.45
Bid140.59 x 900
Ask140.90 x 800
Day’s Range139.11 – 141.34
52 Week Range81.21 – 158.40
Avg. Volume15,318,444
Market Cap728.982B
Beta (5Y Monthly)1.23
PE Ratio (TTM)27.61
EPS (TTM)5.09
Earnings DateN/A
Forward Dividend & Yield2.05 (1.46%)
Ex-Dividend DateJun 13, 2024
1y Target Est137.79

A phenomenon that’s increasingly prevalent with artificial intelligence (AI) stocks is the investor practice of viewing them all through the same lens. For example, when one company in the AI space reports strong financial results, other stocks in the space get a lift as investors expect a rising tide to lift all boats.

That appeared to be the case today, as foundry Taiwan Semiconductor Manufacturing (NYSE: TSM) jumped 3.3%, semiconductor giant Intel (NASDAQ: INTC) rallied 2.3%, and database specialist Oracle (NYSE: ORCL) climbed 1.6% as of 12:45 p.m. ET on Thursday.

A check of all the usual suspects — regulatory filings, financial reports, and changes to analysts’ price targets — didn’t reveal much in the way of company-specific news driving the results (more on that in a bit). This suggests that investors were reacting to the financial results of another beneficiary of the AI revolution, and they liked what they saw.

A rising tide lifts all boats

Micron Technology (NASDAQ: MU) released the results of its fiscal 2024 second quarter (ended Feb. 29) on Wednesday, and investors were clearly impressed. The computer memory specialist generated revenue of $5.8 billion, an increase of 23% year over year, resulting in adjusted earnings per share (EPS) of $0.42, much improved from a loss of $1.91 in the prior-year quarter. Driving the results was surging demand for high-bandwidth memory, which helped boost Micron’s profit margins.

The results blew past Wall Street’s most bullish expectations, as analysts’ consensus estimates were calling for revenue of $5.35 billion and adjusted EPS of $0.24.

If the robust results weren’t enough to drive the stock higher, Micron’s forecast was eye-opening and caught investors off guard. For the third quarter, management is guiding for revenue of $6.6 billion, which would represent growth of 76% year over year, driving adjusted EPS to $0.45, both at the midpoint.

A growing trend

While a good many AI stocks were climbing on Thursday, there was some company-specific news for two of companies in our trio.


KeyBanc analyst Jackson Ader initiated coverage on Oracle, assigning an overweight (buy) rating and a $150 price target. This represents potential upside for investors of 16% compared to Wednesday’s closing price. He cited Oracle’s recent results, saying he expects its cloud growth to remain above 50% in 2024 and 2025. He further believes Oracle can “build a legitimate fourth” cloud infrastructure provider in the U.S., a space that is currently dominated by Amazon Web Services (AWS), Alphabet‘s Google Cloud, and Microsoft Azure.

Intel is likely still riding the wave of optimism from yesterday’s announcement that it had been awarded $8.5 billion in direct funding under the CHIPS and Science Act to build leading-edge chip factories in the U.S.

These developments suggest that the accelerating adoption of AI continues to increase the fortunes of companies in the space. But investors should take care not to assume all AI stocks are created equal, but rather ensure the companies they invest in continue to execute on the opportunity represented by AI.

In terms of valuations, Intel, Oracle, and Taiwan Semiconductor are all relatively inexpensive, selling for 32 times, 24 times, and 23 times forward earnings, making each one a buy for investors with a long-term outlook.

Each of these stocks has intriguing potential, particularly when viewed in terms of the opportunity represented by AI.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Taiwan Semiconductor Manufacturing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Danny Vena has positions in Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, Oracle, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short May 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.

Why Taiwan Semiconductor, Intel, and Other Artificial Intelligence (AI) Stocks Rallied on Thursday was originally published by The Motley Fool

Information Technology Sector Soaring to New Heights

The technology sector plays a crucial role in driving innovation, efficiency, and competitiveness across various industries. It also allows businesses and corporations to enhance productivity, make faster and more informed decisions, and stay ahead in a rapidly evolving digital landscape. According to a report by The Business Research Company, the global information technology (IT) market was valued at $8.5 trillion in 2023. Looking forward, the market is expected to grow at a compound annual growth rate (CAGR) of 8.3% from 2024 to 2028 to reach a value of $12.41 trillion by the end of the forecast period.

The surge in demand for new and innovative technologies across various industries is a key factor creating a positive outlook for the market. Cloud computing and cloud services are driving innovation and scalability, enabling organizations to access resources flexibly and cost-effectively. Similarly, Artificial Intelligence (AI) is revolutionizing industries by enhancing automation, decision-making processes, and customer experiences. An increasing number of corporations and businesses are embracing digital technologies to streamline operations, improve efficiency, and stay competitive in a world that is becoming increasingly digital. Emerging technologies and innovations, including the Internet of Things (IoT), blockchain, and augmented reality, continue to create new growth opportunities.

Tech Giants in Action

The tech industry is dynamic and diverse. Some of the most prominent technology companies leading the way in innovation and development are Alphabet Inc. (NASDAQ:GOOGL), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT).


Technology companies are embracing emerging trends and focusing on developing innovative products and services. On February 2, Apple Inc. (NASDAQ:AAPL) announced that the Apple Vision Pro will be available at Apple Store locations throughout the US. Apple Vision Pro is a cutting-edge spatial computer that transforms how people work, connect, collaborate, relive memories, and enjoy entertainment. The new breakthrough product seamlessly merges digital content with the physical world, delivering immersive spatial experiences in visionOS. This advanced system is operated using a user’s eyes, hands, and voice, which are the most natural and intuitive inputs available.


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