Linde Reports Better-Than-Expected Q4 Results Amid Conservative Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Source: CNBC
- Revenue Growth: Linde's fourth-quarter revenue increased approximately 6% year-over-year to $8.76 billion, surpassing the consensus estimate of $8.64 billion, indicating effective pricing strategies despite no significant increase in base volume activity.
- Profitability Improvement: Adjusted earnings per share rose nearly 5% year-over-year to $4.20, exceeding the consensus estimate of $4.18, reflecting the company's ongoing efforts in cost control and productivity enhancement, which bolstered investor confidence.
- Strong Backlog: Linde ended the year with a record backlog of $10 billion, not including over $500 million in investments for rocket propellants, underscoring its leadership in the aerospace sector and potential benefits from growth in the space industry.
- Stock Buyback Program: During the stock's decline, Linde repurchased $1.4 billion in shares in the fourth quarter, bringing the total for the year to $4.6 billion, demonstrating the company's confidence in its value while providing returns to shareholders.
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Analyst Views on TSM
Wall Street analysts forecast TSM stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for TSM is 313.46 USD with a low forecast of 63.24 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
8 Analyst Rating
7 Buy
1 Hold
0 Sell
Strong Buy
Current: 330.730
Low
63.24
Averages
313.46
High
390.00
Current: 330.730
Low
63.24
Averages
313.46
High
390.00
About TSM
Taiwan Semiconductor Manufacturing Co Ltd is a Taiwan-based integrated circuit foundry service provider. The Company is primarily engaged in integrated circuit manufacturing services. It offers advanced process technologies, specialised process solutions, advanced photomask and silicon stacking, and packaging-related technologies, while supporting a comprehensive design ecosystem. The Company's products serve diverse electronic sectors including artificial intelligence, high-performance computing, wired and wireless communications, automotive and industrial equipment, personal computing, information applications, consumer electronics, smart internet of things, and wearable devices.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Profit Margins: The company reported a profit margin of 48.3%, indicating its competitive advantage in high-end chip manufacturing, effectively controlling costs while achieving high returns.
- Advanced Process Technology: In 2023, over half of TSMC's revenue came from chips larger than 7nm, with significant increases in the production of 3nm and 5nm chips, as 3nm chips accounted for 28% of total shipments, showcasing ongoing investment in technological innovation.
- Robust Market Demand: With the rapid advancement of artificial intelligence technologies, TSMC is experiencing increasing customer demand, solidifying its status as the world's largest chip foundry and is expected to benefit from the growth in AI infrastructure investments.
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- TSMC's Industry Position: As the world's largest semiconductor foundry, TSMC produced over 11,800 products across 288 different processes in 2024, demonstrating its unparalleled influence and customer base in the industry.
- Strong Financial Performance: TSMC reported fourth-quarter revenue of $33.73 billion, a 25.5% increase year-over-year, with a profit margin of 48.3%, indicating robust profitability in a rapidly growing market.
- Technological Advancements and Market Demand: TSMC derived over half of its revenue from chips larger than 7 nanometers in 2023, but has significantly increased production of 3nm and 5nm chips, which now account for 28% and 35% of total shipments respectively, showcasing its agility in adapting to technological advancements and market demand shifts.
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- GPU Dominance: Nvidia's GPUs account for over 90% of the market in AI data centers, ensuring the company's leading position in technological innovation with superior computing capabilities and a gross margin of 70%.
- Innovation Cycle Risks: While Nvidia's strategy of launching a new GPU annually aims to maintain its competitive edge, this rapid innovation could lead to a depreciation of older chips by 30% to 50%, potentially affecting customer upgrade decisions and future demand.
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- Innovation Cycle Risks: While Nvidia's strategy of launching a new GPU annually aims to maintain its technological advantage, this rapid innovation could lead to significant depreciation of older chips, potentially impacting businesses' upgrade decisions and suppressing demand for new products in the coming years.
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- Tariff Agreement Reached: Taiwan and the U.S. agreed last month to reduce tariffs on Taiwanese exports from 20% to 15%, indicating progress in trade relations, yet Taiwan remains firm on not relocating its science parks, reflecting its protective stance on domestic industries.
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- Intensifying Market Competition: As AI hardware and cloud computing rapidly evolve, competition among related companies will intensify, prompting investors to monitor these firms' performance in technological innovation and market share.
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- Significant Revenue Growth: TSMC's Q4 revenue reached $33.73 billion, reflecting a 25.5% year-over-year increase, demonstrating strong demand in the semiconductor market and reinforcing its leadership position.
- Strong Profit Margins: The company reported a profit margin of 48.3%, indicating its competitive advantage in high-end chip manufacturing, effectively controlling costs while achieving high returns.
- Advanced Process Technology: In 2023, over half of TSMC's revenue came from chips larger than 7nm, with significant increases in the production of 3nm and 5nm chips, as 3nm chips accounted for 28% of total shipments, showcasing ongoing investment in technological innovation.
- Robust Market Demand: With the rapid advancement of artificial intelligence technologies, TSMC is experiencing increasing customer demand, solidifying its status as the world's largest chip foundry and is expected to benefit from the growth in AI infrastructure investments.
See More
TSMC: The Winner in the AI Era
- Market Growth Potential: According to Fortune Business Insights, the AI market is projected to grow from $375.9 billion this year to $2.48 trillion by 2034, representing a compound annual growth rate of 26.6%, which presents significant opportunities for related companies.
- TSMC's Industry Position: As the world's largest semiconductor foundry, TSMC produced over 11,800 products across 288 different processes in 2024, demonstrating its unparalleled influence and customer base in the industry.
- Strong Financial Performance: TSMC reported fourth-quarter revenue of $33.73 billion, a 25.5% increase year-over-year, with a profit margin of 48.3%, indicating robust profitability in a rapidly growing market.
- Technological Advancements and Market Demand: TSMC derived over half of its revenue from chips larger than 7 nanometers in 2023, but has significantly increased production of 3nm and 5nm chips, which now account for 28% and 35% of total shipments respectively, showcasing its agility in adapting to technological advancements and market demand shifts.
See More
Nvidia's AI Revolution and Risks Ahead
- Market Value Surge: Since the beginning of 2023, Nvidia has added $3.9 trillion in market value, becoming Wall Street's most valuable public company, reflecting its strong competitive advantages and market demand in the AI sector.
- GPU Dominance: Nvidia's GPUs account for over 90% of the market in AI data centers, ensuring the company's leading position in technological innovation with superior computing capabilities and a gross margin of 70%.
- Innovation Cycle Risks: While Nvidia's strategy of launching a new GPU annually aims to maintain its competitive edge, this rapid innovation could lead to a depreciation of older chips by 30% to 50%, potentially affecting customer upgrade decisions and future demand.
- Software Platform Support: The CUDA software platform enhances customer loyalty to Nvidia's products, and ongoing technological advancements keep older chips highly efficient, which may slow down demand for new GPUs.
See More
Nvidia's AI Technology Leads Market Transformation
- Market Value Surge: Since the beginning of 2023, Nvidia has added $390 billion in market value, reflecting strong demand in the AI sector and solidifying its position as the world's most valuable public company.
- GPU Market Dominance: Nvidia's GPUs account for over 90% of the market in AI-accelerated data centers, ensuring pricing power and profitability with gross margins exceeding 70%, which strengthens its competitive edge.
- Innovation Cycle Risks: While Nvidia's strategy of launching a new GPU annually aims to maintain its technological advantage, this rapid innovation could lead to significant depreciation of older chips, potentially impacting businesses' upgrade decisions and suppressing demand for new products in the coming years.
- Software Platform Support: Nvidia's CUDA software platform enhances customer loyalty to its products, and ongoing advancements allow older chips to remain highly effective, reducing the urgency for customers to upgrade to the latest GPUs, which may affect future sales growth.
See More
Taiwan Rejects U.S. Semiconductor Production Demands
- Capacity Transfer Rejection: Taiwan's Vice Premier Cheng Li-chiun firmly stated that relocating 40% of semiconductor capacity to the U.S. is impossible, emphasizing that Taiwan's semiconductor ecosystem, developed over decades, cannot be easily shifted, which will impact the U.S.'s strategic positioning in the semiconductor sector.
- Continued Massive Investment: Taiwan Semiconductor Manufacturing Company (TSMC) has committed $165 billion to build semiconductor fabs in Arizona; however, Cheng noted that Taiwan's overall capacity will continue to grow, demonstrating Taiwan's sustained competitiveness in the global semiconductor market.
- Tariff Agreement Reached: Taiwan and the U.S. agreed last month to reduce tariffs on Taiwanese exports from 20% to 15%, indicating progress in trade relations, yet Taiwan remains firm on not relocating its science parks, reflecting its protective stance on domestic industries.
- External Expansion Constraints: Economists suggest that due to slow construction timelines in Arizona, TSMC is expected to move less than 15% of its advanced chip production to the U.S., limiting America's autonomy in semiconductor manufacturing and exacerbating tensions in the global supply chain.
See More
Analysis of Investment Opportunities in Artificial Intelligence
- Hardware Companies Surge: Companies like Nvidia, Broadcom, and Taiwan Semiconductor are profiting from AI demand, with Nvidia's GPUs being the preferred choice for AI workloads; AI spending is projected to reach $3 trillion to $4 trillion by 2030, indicating significant market potential.
- Cloud Computing Market Expansion: Major cloud providers such as Amazon, Google, and Microsoft are heavily investing in data centers to meet the demand for computing power from AI developers, with Microsoft Azure achieving a growth rate of 39% in Q2 FY 2026, showcasing its competitive edge in the market.
- Recurring Revenue Stream: The rental model of cloud computing provides these companies with a continuous revenue stream; while they need to regularly replace computing units, the initial investment in infrastructure is already covered, leading to a substantial increase in future profitability.
- Intensifying Market Competition: As AI hardware and cloud computing rapidly evolve, competition among related companies will intensify, prompting investors to monitor these firms' performance in technological innovation and market share.
See More
