Chipmakers Taiwan Semi (TSM) and Micron (MU) are advancing 4% and 9%, respectively, today after electronics maker Foxconn reported slightly stronger-than-expected fourth-quarter results yesterday.
Taiwan-based Foxconn is the largest manufacturer of Apple’s (AAPL) iPhones, while Apple buys chips from both Taiwan Semi and Micron.
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Foxconn’s Q4 Results
Foxconn’s Q4 sales climbed 15% last quarter versus the same period a year earlier to 2.13 trillion New Taiwan dollars or $65 billion. Analysts had expected the company’s revenue to come in at 2.1 trillion New Taiwan dollars, according to an average compiled by LSEG SmartEstimate.
Foxconn attributed its strong results primarily to robust demand for its AI servers. Also importantly, however, the firm noted that the demand for smart consumer electronics products, a category that encompasses iPhones, was little changed last quarter versus Q4 of 2023. That statement may have come as a relief to some investors after China last week reported that the number of foreign-made smartphone shipments in the country had tumbled 47% year-over-year in November.
The Recent Performances of TSM Stock and MU Stock
In the last three months, TSM has advanced 18%, while it has risen 9.5% in the last month. MU stock has retreated 3.5% in both of those periods.
While we acknowledge the potential of TSM, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: The author owns shares of MU and has no intent to trade them in the next 48 hours. This article is originally published at Insider Monkey