Breakfast News: TSM Rides AI Momentum

Breakfast News: TSM Rides AI Momentum

1. TSM Profit Jumps 39% as AI Dominates

Taiwan Semi (TSM -0.30%) posted strong quarterly results with a 39.1% increase in earnings versus last year, with growth in advanced chip production being the main revenue driver. The stock rose around 2% in pre-market trading in response.

• "Recent developments in the AI market continue to be very positive": CEO C.C.Wei said increasing adoption of AI models is aiding demand for semiconductor products, with large growth potential even if his firm has restricted access to China.
• TSM raises 2025 revenue growth outlook to mid-30% range: Following Q2 results in July, Fool analyst Sanmeet Deo, CFA, commented "as the foundry for the entire AI revolution – from data centers to autonomous cars – TSM is a foundational stock for investors betting big on artificial intelligence."

2. Microsoft Accelerates China Decoupling

Nikkei Asia reports Microsoft (MSFT -0.03%) is planning to shift production of most new products out of China next year, as it tries to decouple from the country following U.S. trade tensions resurfacing over the past week.

• Surface laptops and data center servers included: Microsoft has already moved a large amount of server output and other products elsewhere, but it is reportedly aiming for 80% of related materials to come from outside China in the new plans.
• Microsoft follows other large tech competitors: The supply chain diversification news isn't unique, with both Amazon (AMZN 1.08%) and Alphabet (GOOG 1.50%) either limiting Chinese access or expanding production in places like Thailand.

3. Salesforce Rallies on Raised 2030 Outlook

Recommended several times in Rule Breakers, Salesforce (CRM 7.77%) popped over 3.5% higher following yesterday's closing bell after the business raised its long-term revenue targets during its investor day, citing continued tech innovation.

• "Seeing this innovation translate into real customer success directly fuels our confidence": Robin Washington, the Chief Financial and Operating Officer, expects the company to achieve an organic annual growth rate exceeding 10% between now and 2030.
• Continued push to expand Agentforce reach: Salesforce's major growth bet is the Agentforce AI tool, with about 12,000 customers already using it, along with internal deployment saving $100 million in costs a year.

4. Finance Earnings to Watch Today

Stock Advisor recommendation Interactive Brokers (IBKR 1.33%) is due to report after the closing bell, with another record-breaking revenue haul expected as the company benefits from client activity from market volatility.

• Revenue expected to jump 23.9% versus last year: Charles Schwab (SCHW 0.92%) will release earnings before the market opens as investors watch for updates from last quarter on net interest income and further growth in the managed investing solutions division.
• 4.48% dividend yield versus 1.17% for the S&P 500: U.S. Bancorp (USB 2.24%) should provide a quarterly update ahead of the opening bell, with a focus on payment services and credit quality when it comes to loans.

5. Your Take

Taiwan Semi is up 245% over the last 5 years. Across the same period, the S&P 500 is up 91%. But will TSMC be a market-beater over the next 5 years? Debate with friends and family, or become a member to hear what your fellow Fools are saying.