Taiwan Semi’s August Revenue Surges: 8 Key Items Shaping the Pro Portfolio Today
Normally we share 8 key items influencing the market heading toward the start of the day’s trading. Today, however, because we’re sitting in for Doug Kass over at TheStreet Pro’s Daily Diary, we’re going to shake things up a bit so we’re not being overly repetitive. Be sure to head over to the Diary, but with that in mind, here’s 8 things shaping the Pro Portfolio today.
1. Following Apple’s ($AAPL) Surprise and Shine event yesterday, we maintained our AAPL price target and so far, while there is enthusiasm for the company’s new products, especially the iPhone Duo, we are not seeing any meaningful price target adjustments across Wall Street. It would seem we are not alone in wanting to see consumer reception to these new devices and their higher prices points.
2. Taiwan Semiconductor Manufacturing ($TSM) reported August consolidated revenue of NT$514.81 billion, up 53.3%, year over year, from NT$335.77 billion. August revenue increased 10.1% sequentially from NT$467.58 billion in July, but here’s the thing, that 53.3% August revenue growth is a reacceleration from the 44.7% year-over-year figure posted in July.
TSM’s August report follows the record August revenue reported a few days ago by Foxconn of ~$29.14 billion, up 52% year over year. Our read-through on those data points are positive for the Portfolio’s chip holdings and support the view that chip capacity is poised to remain tight for some time, a strong positive for our position in Applied Materials (AMAT)
3. Piper Sandler started coverage on Marvell ($MRVL) with an overweight rating and a $270 target, naming it a long-term winner alongside Nvidia ($NVDA) and Broadcom ($AVGO). Piper also initiated coverage on AVGO shares with an Overweight rating and a $460 target, and the same rating on NVDA shares with a $300 target.
4. Oppenheimer is reiterating an Outperform rating on Alphabet ($GOOGL) and substantially increasing Google Cloud Platform (GCP) estimates following what it is calling a “deep-dive” into the company’s TPU outlook. Oppenheimer is now forecasting 6.6GW of TPU sales or about $170 billion cumulative incremental TPU sales through 2028, which is not in Wall Street estimates. New estimates suggest 15% to 30% upside to Street GCP revenue and 4% to 18% upside to consolidated EPS in 2027-2028. Oppenheimer also conducted an AI survey that suggests Alphabet remains in lead position with consumers. While conducted before Meta’s ($META) Muse launch, its survey finds Gemini is the second most used AI behind ChatGPT, but participants trust Google about four times more than Meta with passwords.
5. Method Security and Palantir ($PLTR) announced the Cardinal Program, an initiative to strengthen national cyber resilience. Cardinal will provide select municipalities, utilities, and critical infrastructure operators with opt-in, continuous autonomous security assessments at no cost. Palantir Foundry, AIP, and the Ontology for Cybersecurity will provide secure infrastructure for Method to integrate and deliver findings and support collaboration.
That’s one of the announcements stemming from Palantir’s latest AIPCon event being held today. Other presenting customers include Acrisure, Cisco ($CSCO), Eaton ($ETN), Federal Aviation Administration, Hexion, L3Harris ($LHX), Novartis ($NVS), Nvidia, Ondas Sentinel, USA TODAY, and Zeta Global ($ZETA).
6. Costco Wholesale ($COST) plans to open 14 new stores in the next two months in a mini burst of development that includes replacing some smaller stores with larger ones. Earlier this year, CEO Ron Vachris said the company aims to open 30 or more warehouses annually over the next five to 10 years and this move not only gives it a jump on hitting that target for the coming year, but it should also drive another step up in membership fee revenue in the first half of calendar 2027.
Based on this morning’s August inflation data, the continued move higher in oil and gas prices, we continue to see Costco well positioned heading into the holiday shopping season. I’ll also share that I was in two different Costco’s, once over the weekend and late yesterday, getting ready for one of my daughters’ wedding later this month. Both times there were very long lines at the Costco gas stations and the registers.
Next week brings the August Retail Sales report, and with it context for Costco’s August sales figures and adjusted comp sales. And while shares of TJX ($TJX) have been under continued pressure, the same line of reasoning keeps us bullish on them as we move toward and then into the holiday shopping season.
7. Reuters is reporting that M&A activity in the aerospace supply chain is heating up as Boeing ($BA) and Airbus ($EADSY) aim to ramp their production schedules. Through August, aerospace and defense-focused investment bank Janes Capital Partners tracked 154 publicly disclosed commercial aerospace transactions this year, just shy of the annual record of 159 set in 2019.
We’ve seen similar moves to consolidate supply chains ahead of a sustained ramp in the mobile phone and semi-cap industries, and we take it as a positive signal for Boeing’s efforts to not only increase production but deliveries, cash flow and earnings.
8. Companies reporting today per TipRanks: PM – Adobe ($ADBE), Oracle ($ORCL), RH ($RH).
More Pro Portfolio:
- Buying More of This Semi-Cap Play on Tightening Industry Capacity
- We’re Tracking 28 Signals Across 8 of the Portfolio’s Investment Themes
- Weekly Roundup: Maintaining Our Lead With a Telling Week Ahead
At the time of publication, TheStreet Pro Portfolio was long AAPL, AVGO, BA, COST, ETN, GOOGL, META, MRVL, NVDA, PLTR, and TJX.
