TSMC posted quarterly EPS of $4.60, above the $4.45 consensus, and revenue of $46.87 billion, up 41.1% year over year. For the fourth quarter it guided to $52.3–54.3 billion in revenue, implying about 58% growth at the midpoint, and lifted its 2026 revenue growth outlook to around 44% in U.S. dollar terms. Management described AI demand as extremely robust and said supply still falls short, with 2026 capital expenditures of $60–64 billion. Gross margin slipped to 66.4% in the third quarter and is guided to about 66% next quarter, as the steep N2 ramp and higher-cost overseas fabs weigh on profitability. Even so, chip stocks sold off on concerns that heavy AI spending may be financed with debt.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on themarketsdaily.com ↗
Related news
- 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.
- Taiwan Semiconductor Falls 3% Despite Record Quarterly Profit; Intel Drops 4%, AMD Slides 3%
Taiwan Semiconductor (TSM) fell 3% to $418.90 even after reporting a sixth straight quarter of record profit, with revenue and net income both sharply higher year over year. Gross margin narrowed from the prior quarter, which management attributed mainly to dilution from the initial ramp of its newest process node, with overseas fab costs adding pressure. CEO C.C. Wei said AI demand remains extremely strong and above supply, while skeptics argue the shares had already run up before the report. Intel (INTC) dropped 4% to $94.33, Advanced Micro Devices (AMD) slid 3% to $552.98, and the iShares Semiconductor ETF (SOXX) fell 3%, more than the 1% decline in Invesco QQQ Trust (QQQ).
- Taiwan Semiconductor Manufacturing: 3 Key Takeaways for Long-Term Investors
On its Q3 2026 earnings call on Oct. 15, 2026, TSMC projected full-year 2026 revenue growth of around 44% in U.S. dollar terms, citing sustained demand for leading-edge chips. Chairman and CEO C.C. Wei said annual capacity for its N2 family of 2-nanometer technologies is expected to more than double in 2027, with ramps at Hsinchu and Kaohsiung. Management is raising capital expenditures to build nearly 20 fabs worldwide and says the shift from chatbots to agentic AI is lifting demand for high-performance computing chips. CFO Wendell Huang added that overseas expansion requires careful cost control to protect long-term margins.
- Here's What a $1,400 Investment in Taiwan Semiconductor Manufacturing (TSMC) Stock Could Be Worth in 3 Years
Analysts expect AI infrastructure spending to keep rising for the next few years, with Gartner projecting nearly $2 trillion by 2027 and 87% of surveyed companies expecting their spending to at least double by 2028. The article argues TSMC, the world's largest foundry, benefits regardless of which AI chip company gains share, since it manufactures chips for Nvidia, AMD, Broadcom, Marvell and Alphabet's TPUs. Last quarter revenue rose nearly 34% to $40.2 billion with a 67.7% gross margin, and revenue grew 45%, 52% and 55% in July, August and September in local currency. Analysts forecast adjusted EPS rising from $16.96 this year to $28.64 in 2028. The author estimates that at 18x to 22x forward P/E the stock could trade at $775 to $950 in three years, making a $1,400 investment (three shares) worth $2,325 to $2,850 in 2029; key risks are an AI spending slowdown or TSMC losing share and pricing power to Samsung, Intel or the Terrafab joint venture.
- Taiwan Semiconductor Manufacturing Just Dropped a Major Bombshell Investors Must Be Aware Of
Taiwan Semiconductor Manufacturing (TSM) reports Q3 earnings on October 15, but its monthly revenue already points to accelerating growth. Analysts forecast revenue growth of 47% in Q3 and 54% in Q4, while the stock trades at about 27 times forward earnings, versus nearly 70 times for Intel and about 80 times for AMD. Wall Street has modeled 36% growth for 2027, but the author believes the true rate could be closer to the mid-40% range seen this year. The author argues that if TSMC signals 2027 growth at or above 2026's pace, the stock could rise sharply after the report.
- Taiwan Semiconductor Posts Record Q3 Results: Time to Buy the Dip?
Taiwan Semiconductor (TSM) reported record third-quarter earnings of $4.60 per share, beating the Zacks Consensus Estimate of $4.45 and up 57% from $2.92 a year earlier, while revenue rose 41% to $46.72 billion, above the $45.61 billion expected. Gross margin was 66.4% and operating margin 58.7%, with advanced technologies making up 79% of wafer revenue on demand from Nvidia, Apple and AMD, and the company has now beaten earnings expectations for 24 consecutive quarters. For the fourth quarter, it guided to revenue of $52.3–$54.3 billion, above the roughly $50.22 billion Wall Street expected, and gross margin of 65%–67%. Shares have fallen 9% this month but are still up 36% year to date; at around $412 a share, TSM trades at 25X forward earnings, a modest premium to the Zacks Computer and Technology sector's 23X. The article argues this valuation still looks reasonable, making TSM worth considering after the recent pullback.
Related markets
Latest news
- Earnings live updates: All eyes on Musk and Meta as Q3 earnings rev up
Big tech is the focus of this week's earnings season, with Meta (META), SpaceX (SPCX) and Tesla (TSLA) due to report. SpaceX and Netflix (NFLX) kick off on Tuesday after the bell, while Tesla and Meta report on Wednesday, offering an early read on the Magnificent Seven and the AI trade. Wall Street estimates S&P 500 earnings growth of 29.6%, according to FactSet; if that holds, it would be the third straight quarter of growth above 25%. General Motors (GM), IBM (IBM), United Airlines (UAL) and Procter & Gamble (PG) also report this week.
- Mysterious UAV Enters Lithuania as NATO Fighters Fail to Intercept It
On the morning of October 18, an unidentified drone entered Lithuanian airspace between 6:00 and 8:00, prompting an air alert and the scrambling of NATO jets, which escorted the object but could not shoot it down due to difficult weather. Debris later found in Juojonis village in Pasvalys district was initially identified as drone parts, and the military says it may have entered from Poland. Latvia issued a similar warning for several regions and cancelled it at 8:12, though its army has not confirmed the object was a drone. Prime Minister Mindaugas Sinkevičius said the sabotage hypothesis must be verified, while law enforcement works to determine the drone's origin; earlier, on September 15, Italian Eurofighter Typhoons shot down a drone that had flown into Lithuania from Belarus.
- Corning Is Moving Beyond Fiber Cables. Can AI Networking Pay Off?
Corning (GLW) is extending beyond fiber cables into optical components inside AI systems, having demonstrated optical connectivity with Lumentum and Astera Labs on October 12 and partnered with Nvidia on a planned tenfold expansion of optical connectivity capacity in the US. Its Optical Communications sales rose 32% year-over-year to $2.07 billion in Q2 2026, and management sees a potential $10 billion revenue opportunity by 2030 from a photonics platform, though timing and adoption remain uncertain. Still, the valuation is elevated, with a forward non-GAAP P/E of 44.81x, about 84% above its 5-year average of 24.31x, while analysts expect EPS to grow 30.41% in December 2026 and 33.02% in December 2027. The article notes that slower AI spending or delayed CPO adoption could pressure the stock.
- Google’s Next AI Chip Is Running Late. Why Marvell May Be Fine
GF Securities says one part of Google's TPU v9 design slipped about three weeks, likely due to a redesign, pushing the timeline back roughly a quarter, with mass production now expected in Q2 2027. Packaging substrate yields of just 45% to 50% are a key obstacle, but GF sees no demand problem, citing strong TPU demand from Google and external customers such as Anthropic. The firm points to MediaTek, not Marvell (MRVL), as facing short-term headwinds, so any benefit to Marvell appears indirect. At 63x forward earnings, a 66% premium to its five-year average P/E of 38.02x, the article concludes the delay is not by itself a reason to buy.
- Stocks bounce back, Anthropic's "Public Benefits", and Musk's promise to American kids
The 8:30 show, hosted by Julie Hyman, Pras Subramanian and Jake Conley, discusses the stock market's rebound. Other topics include Anthropic's (ANTH.PVT) commitment to a “Public Benefit” fund, Elon Musk's promise to American children about SpaceX (SPCX) stock ahead of earnings, and doubts over an IPO after Microsoft (MSFT) withdrew.
- Microsoft vs. Alphabet: Is GOOGL’s Cloud Growth Worth More Than Investors Think?
Microsoft (MSFT) and Alphabet (GOOGL) trade at forward P/E ratios of 25.13 and 22.83, respectively. Google Cloud revenue jumped 82% to $24.8 billion in the second quarter, with operating income rising from $2.8 billion to $8.8 billion, while Azure and other cloud services grew 43%. Both companies face heavy infrastructure spending: Microsoft spent $35.8 billion on property and equipment, pushing its cloud gross margin down to 65%, while Alphabet spent $44.9 billion, leaving roughly negative $5.85 billion in quarterly free cash flow. The article argues Alphabet's $9.11 EPS is unreliable because about $98 billion came from net other income, so its 30% operating-income growth better reflects underlying performance. Microsoft has a more diversified earnings base and higher consolidated operating margins, but the key question is whether either company can turn AI demand into cash after paying for infrastructure.
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.