Taiwan Semiconductor's Beat-and-Raise Guidance a Nod to Nvidia, Other Holdings

For now the drama over whether Trump will fire Fed Chair Jerome Powell has quieted and attention is shifting back to the June-ending quarterly earnings reports. 

So far, big bank earnings have been ahead of market expectations, but we are now starting to see a wider array of companies report. This includes Taiwan Semiconductor TSM, which delivered better-than-expected quarterly results as it benefited from AI and data center demand. Based on the company’s monthly revenue figures, we expected a strong June quarter, but it was the end market commentary and guidance we were more interested in. TSM did not disappoint.

Digging into end-market results from Taiwan Semiconductor, we find strong support for the Portfolio’s chip holdings. The company’s High-Performance Computing (HPC) segment, which housed AI and data center markets, climbed to 60% of revenue in Q2 2025 compared to 52% in the year-ago quarter. Cutting those figures from a different angle, we find HPC revenue soared more than 65% on a year-over-year basis and just shy of 20% compared to Q1 2025. 

With TSM guiding current quarter revenue to $31.8 billion to $33.0 billion, up almost 38% on a year-over-year basis and ahead of the $30.7 billion consensus, it’s safe to say that end market strength is poised to continue. This backs our positions in Nvidia NVDA and Marvell MRVL, and we continue to rate both stocks Ones.

On the earnings call, TSM was asked about Nvidia’s pending approval for its H20 chips to China and related shipment volumes. While somewhat elusive on the topic, reading between TSM management comments, it seems they have not factored that into their outlook as they are waiting for final approval and word from Nvidia. This means we’ll want to track TSM’s monthly revenue figures in 2H 2025, looking for a sharper-than-usual revenue ramp.

TSM’s other core end market, smartphones, also rose double-digits on both a sequential and year-over-year basis, as did its "internet of things" business. We are entering the seasonally strong time of year for those markets, and while TSM did not give much color on the outlook for them, we will be focusing on comments from Samsung SSNLF and Apple AAPL as well as component suppliers like Skyworks SWKS, Qorvo QRVO, and our own Qualcomm QCOM. That aggregate demand outlook will give us another reason to closely follow TSM’s monthly revenue figures. As it relates to Qualcomm, we will also be following comments for the PC market, which should benefit from the shift to AI PCs as well as the phase out of Windows 10. And for Universal Display OLED shares, we can add quarterly results and guidance from LG Display LPL.

Mark your calendar accordingly for those upcoming reports:

LG Display – July 24

Qorvo – July 29

Qualcomm – July 30

Samsung – July 31

Apple – July 31

Universal Display – July 31

Skyworks - TBD

At the time of publication, the Pro Portfolio was long NVDA, AAPL, MRVL, QCOM, OLED.