TSMC shares have slipped about 14% from early October records, and the article argues the pullback is a buying opportunity given strong fundamentals. The company's Q3 earnings, reported October 15, rose 58% on 41% higher revenue, with 3-nanometer chips at 33% of wafer revenue and 2-nanometer at 8%, and it raised guidance on strong demand for leading-edge technology. The stock carries a Zacks Rank #1 (Strong Buy), and analysts project 2026 revenue growth of 41% and earnings growth of 59%, with 2027 revenue reaching $228 billion. The article also cites projected S&P 500 Q3 earnings growth of 24.6%, but notes that this strength is already priced into the market.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
Open a keyword to see other news on the same topic.
Related news
- Opinion: The Most Important Number in Taiwan Semiconductor's Earnings Report Was 68%
The author argues the most important figure in TSMC's Q3 report is 68%, the share of revenue from high-performance computing (HPC), which grew 22% from the prior quarter. Revenue reached $46.72 billion, up 41.2% year over year, net income rose 68.7%, and gross margin hit 66.4%. Processes at 7nm and below made up 79% of wafer revenue, with 3nm at 33% and 2nm at 8%. TSMC guided Q4 revenue to $52.3–54.3 billion and expects roughly 44% full-year growth in U.S. dollars. The author remains bullish, saying ongoing demand for advanced AI chips should keep profits rising.
- Taiwan Semiconductor Just Proved Why It's a Top AI Investment
TSMC reported a strong third quarter driven by AI chip demand, with revenue up 51% in New Taiwan dollars and 41% in US dollars, and profit up 69% year over year. The stock still fell during the trading day after earnings, which the author attributes more to the broader market outlook than to the results. CEO C.C. Wei said demand is very robust with no sign of slowdown, and that the earlier guidance of a 50% CAGR for AI-related chip revenue from 2024 to 2029 may be too low. The author notes the stock trades at 18 times next year's earnings and 27 times trailing earnings; if TSMC meets 2027 expectations and the valuation holds at 27 times, that math implies a 50% rise, though the author stresses this is only arithmetic and not a certainty.
- TSMC Is Spending up to $64 Billion This Year. Here's Why That's Great News for Investors.
TSMC plans to spend $60 billion to $64 billion this year on factories and equipment, about a third of trailing-12-month revenue, which the article presents as a sign of coming growth. CFO Wendell Huang linked the spending to long-term customer demand, including agentic AI, and said spending from 2026 through 2028 should be significantly higher than in the previous three years. Third-quarter revenue reached a record $46.7 billion, up 41% year over year, with fourth-quarter guidance of $52.3 billion to $54.3 billion, and profit margin rose to 51.1% from 45.7%. The article notes geopolitical risks in Asia and says overseas plants such as Arizona cost more to run and may weigh on future margins. The stock trades at 19 times 2027 earnings estimates, with consensus calling for 28% earnings growth next year.
- TSMC's (TSM) Record AI Demand Comes With a Growing Cost
TSMC (TSM) shares rose 13.14% over the six months to October 15, following a record quarter in which revenue grew 41.2% to $46.7 billion and net income jumped 68.7%, mainly on AI-related chips. The company guides next-quarter revenue to $52.3–54.3 billion and full-year revenue growth of about 44%, with demand also coming from CPUs for AI servers and networking chips. Capex is planned at $60–64 billion for 2026 plus $100 billion for US expansion, while gross margin slipped from 67.7% to 66.4% during the 2nm ramp. The article warns that if customers cut AI spending before new fabs reach full production, both earnings estimates and valuation could come under pressure.
- Taiwan Semiconductor's (TSM) Profit Rose 69% Last Quarter. Is the Stock Still Cheap?
TSMC (TSM) closed at $422.25 on October 15 and has returned 16.21% over six months. The latest quarter was the strongest in the company's history, with revenue of $46.72 billion above management's earlier guidance and net profit up 68.7%, faster than revenue. Gross margin reached 66.4% while the company started mass production on its newest 2nm process, a stage that typically weighs on margins. The risks are a concentrated customer base, spending plans set more than a year ahead, and advanced plants located in Taiwan, whose political status is disputed. The shares trade at 21.41x expected earnings for next year versus 33.67x reported earnings.
- 1 Reason TSMC Stock Could Rally After Its Record Quarter
TSMC's third-quarter revenue rose 41% year over year to $46.7 billion, with high-performance computing, which includes AI data center chips, making up 68% of sales. Management expects fourth-quarter revenue of $52.3 billion to $54.3 billion, about 58% year-over-year growth at the midpoint. CEO C.C. Wei said AI chip demand is still far above TSMC's supply capacity and that AI accelerator sales, forecast to grow at a mid- to high-50s percentage rate annually through 2029, will probably be higher, though TSMC is planning cautiously for 2027 and rising component prices could pressure its smartphone business, which accounted for 21% of third-quarter revenue. The stock, up about 39% year to date as of Oct. 15, 2026, trades at roughly 19 times analysts' 2027 earnings estimates, while Wall Street expects earnings to grow 38% annually over the next several years.
Related markets
Latest news
- Meta Earnings: What To Look For From META
Meta Platforms (NASDAQ:META) will report earnings this Wednesday after the market closes. Last quarter, revenue reached $60.8 billion, up 28% year on year and above analysts' expectations, though revenue guidance for next quarter slightly missed forecasts; daily active users hit 3.6 billion, up 3.4%. The market expects revenue growth of 23.6% this quarter, slowing from 26.2% a year earlier, and analysts have generally reconfirmed their estimates over the past 30 days. Over the last month, consumer internet stocks have gained 1.3% on average, while Meta is down 4.8%.
- An AI bust could come from places investors arent watching , an economist says
Concerns about an AI bubble are growing, and TS Lombard's Dario Perkins warns that investors may be overlooking other risks. Debt among smaller cloud providers, model developers and suppliers could reach $2 trillion by the end of 2027. Perkins does not see this as a systemic risk, but warns that earnings disappointments and canceled orders could ripple through the ecosystem, and that a chip glut could follow over-ordering. Much of the industry's revenue growth still comes from spending within the AI ecosystem rather than from businesses and consumers outside it. He also flags political backlash, noting that ordinary people dislike AI and nearby datacenters, and warns that one high-profile accident could turn AI toxic.
- Yen jumps after JGB auction draws big demand , euro finds relief
The yen rose 0.2% to 158.15 per dollar in Asian trading after a 20-year Japanese government bond auction drew bids of 5.84 times the amount sold, well above the 4.01 times at the previous auction, and the yield fell 6 basis points to 3.71%. A State Street strategist said the record demand suggests sidelined cash is returning and that JGBs are becoming a relative haven from political and fiscal volatility in Europe, particularly France. Anti-government protests in France prompted curfews in several cities, while Italy said it would send 500 troops after two days of unrest, and the euro rallied 0.2% to $1.1234. Elsewhere, bitcoin slipped 0.3% to $81,674.25 and ether edged down 0.2% to $2,393.21.
- Unemployment rate dips to 4 . 7 % - but vacancies hit five - year low
Vacancies fell by 21,000 to 691,000 in the three months to September, the biggest drop since the three months to March and the lowest since July to September 2014 outside the pandemic, while unemployment dipped in the three months to August. Payroll numbers were down 66,000 over the year to September. The ONS said the fall was mainly among smaller firms struggling with higher labour costs, following rises in employer national insurance, the minimum wage and workers' rights. A CBI survey found labour costs and regulations were making it harder to create jobs, and firms urged the Chancellor not to add to their burden in the October 28 Budget. ICAEW's Suren Thiru said the labour market is 'running on idle' and unemployment could climb above 5 per cent, while Shadow Chancellor Andrew Griffith blamed Labour's 'Jobs Tax' and red tape.
- CNBC Daily Open: Tech rebounds in the U.S., but Asia isn’t buying it yet
U.S. tech stocks rebounded as the Nasdaq Composite rose more than 1% on Monday, with Nvidia up 1.4% and Tesla up 3.8%. In Asia, however, tech shares fell on Tuesday, with South Korea's Kospi down over 4% and Japan's Nikkei 225 down 1.6%. Nvidia also unveiled plans to back four German AI startups as part of its nearly $10 billion European investment commitment. Jenny Lee of Granite Asia said Asian companies are reaching IPOs much sooner, often at four to five years old, while Jio Platforms' Indian IPO saw its anchor investor quota oversubscribed more than 30 times, aiming to raise up to 302 billion rupees ($3.2 billion). In Singapore, several agricultural stocks fell after Senior Minister K Shanmugam warned that companies would not escape responsibility for possible roles in the haze, noting seven firms had been questioned by the Singapore Exchange.
- NiSource (NI) Stock Looks Overvalued Against Its Dividend Outlook
NiSource has nearly doubled shareholders' money over the past five years, delivering a 97.6% total return, which raises the question of whether dividends can justify the current share price. The article highlights a new 20-year energy agreement with Microsoft, including customer-funded grid upgrades and long-term electric service for data centers, which may affect future capital needs and cash-flow visibility. Using a Dividend Discount Model with inputs of about $1.35 dividend per share, roughly 9.07% return on equity, a payout ratio slightly above 61%, and implied dividend growth of about 3.5%, the estimated intrinsic value sits meaningfully below the current share price of $41.95. The model still does not bridge that gap, suggesting income investors are paying a premium for a relatively steady payout with modest assumed growth.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.