AI Powers TSMC’s This fall Earnings Beat: ETFs to Faucet

Taiwan Semiconductor Manufacturing TSM reported sturdy fourth-quarter 2024 outcomes, whereby it beat estimates for each the highest and the underside strains on surging demand for superior chips utilized in AI purposes. This Taiwan-based chipmaker additionally provided a bullish outlook for AI demand.

Traders in search of to faucet TSM’s development might think about ETFs having the most important allocation to the world’s largest contract semiconductor producer. These embrace SP Funds S&P World ex-US ETF SPWO, SP Funds S&P International Know-how ETF SPTE, VanEck Vectors Semiconductor ETF SMH, Matthews Rising Markets ex China Lively ETF MEMX and International X Rising Markets ex-China ETF EMM.

Keep up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Earnings in Focus

Taiwan Semiconductor reported earnings per ADR of $2.24, which outpaced the Zacks Consensus Estimate of $2.16 and improved 57% from the year-ago earnings. Revenues rose 37% yr over yr to $26.9 billion and have been above the consensus estimate of $26.38 billion. TSMC’s high-performance computing division, which encompasses synthetic intelligence and 5G purposes, drove gross sales within the fourth quarter, contributing 53% of revenues.

Taiwan Semiconductor, which makes chips for corporations from Apple AAPL to NVIDIA NVDA, is benefiting from the worldwide AI increase. TSM continues to learn from the rising adoption of superior chips for industry-leading 3-nanometer and 5-nanometer applied sciences. The 5-nanometer wafer accounted for 57% of complete revenues, adopted by the 3-nanometer wafer at 26% and the 7-nanometer wafer at 14% (learn: Play TSMC’s Best Year Since 1999 With These ETFs).

Administration expects “AI accelerators to be the strongest driver of the high-performance computing platform development and the most important contributor when it comes to general incremental income development within the subsequent a number of years.” For the primary quarter of 2025, the corporate expects revenues of $25-$25.8 billion. The Zacks Consensus Estimate is pegged at $23.92 billion. TSMC additionally guided 2025 income development within the mid-20s proportion vary.

ETFs to Faucet

Let’s delve into every ETF under:

SP Funds S&P World ex-US ETF (SPWO)

SP Funds S&P World ex-US ETF tracks the S&P DM Ex-U.S. & EM 50/50 Shariah Index, which is designed to measure the efficiency of sharia-compliant parts of rising market and developed market shares, excluding U.S. shares. It holds a basket of 383 shares, with Taiwan Semiconductor taking the highest spot at 17.5%.

SP Funds S&P World ex-US ETF has gathered $28.7 million in its asset base. It costs 55 bps in annual charges and trades in a decrease common buying and selling quantity of 11,000 shares. SPWO has a Zacks ETF Rank #3 (Maintain).

SP Funds S&P International Know-how ETF (SPTE)

SP Funds S&P International Know-how ETF focuses on giant and mid-cap know-how shares from world wide, with a selected emphasis on corporations pioneering in areas like e-commerce, cloud computing and healthcare know-how. It follows the S&P International 1200 Shariah Info Know-how (Sector) Capped index and holds 99 shares in its basket. Taiwan Semiconductor occupies the highest place with a 17% share.

SP Funds S&P International Know-how ETF has gathered $45.1 million in its asset base and costs 55 bps in charges per yr. It trades in a quantity of 12,000 shares a day on common.

VanEck Vectors Semiconductor ETF (SMH)

VanEck Vectors Semiconductor ETF presents publicity to corporations concerned in semiconductor manufacturing and gear. It follows the MVIS US Listed Semiconductor 25 Index, which tracks essentially the most liquid corporations within the {industry} primarily based on market capitalization and buying and selling quantity. VanEck Vectors Semiconductor ETF holds 26 shares in its basket, with Taiwan Semiconductor occupying the second place at 12.6%.

VanEck Vectors Semiconductor ETF has managed property price $23.1 billion and costs 35 bps in annual charges and bills. SMH trades in a median day by day quantity of 5 million shares and has a Zacks ETF Rank #1 (Robust Purchase) with a Excessive threat outlook (learn: 4 ETF Sectors That Outperformed the S&P 500 Over the Past Five Years).

Matthews Rising Markets ex China Lively ETF (MEMX)

Matthews Rising Markets ex China Lively ETF seeks alpha in International Rising Markets ex China and capitalizes on consumption and innovation tendencies. It holds 67 shares, with TSM being the highest agency with a 15.2% share.

Matthews Rising Markets ex China Lively ETF has AUM of $37.6 million and costs 79 bps in annual charges. It trades in a quantity of three,700 shares a day on common.

International X Rising Markets ex-China ETF (EMM)

International X Rising Markets ex-China ETF is an actively managed fund in search of to spend money on rising market corporations, excluding China, which might be believed to realize or keep a dominant place inside their respective market. As a part of its funding technique, EMM goals to establish early winners in rising industries the place entrepreneurship can produce long-term international competitiveness. International X Rising Markets ex-China ETF holds 71 shares in its basket, with Taiwan Semiconductor taking the highest place at 10.5% share.

International X Rising Markets ex-China ETF has AUM of $24.1 million and costs 75 bps in annual charges. It trades in a quantity of three,000 shares a day on common.