TSMC reported third-quarter revenue of $46.7 billion, above the top of its $44.6–45.8 billion forecast range, with high-performance computing (including AI chips) making up 68% of total revenue. It guided fourth-quarter revenue to $52.3–54.3 billion and now sees 2026 revenue growing about 44% in U.S. dollars. Chairman and CEO C.C. Wei said AI chip demand is still far above supply and that there was no sign of slowdown. Meanwhile, Nvidia shares fell about 9% from their October 6 record close, ending October 15 at $217.23. The author argues the gap between TSMC's results and Nvidia's share price makes the stock worth buying, at about 14 times expected earnings versus about 19 times for TSMC, while advising keeping the position small given its volatility.
Summary written by Upside AI from the original article. Read the source for full details.
Read the original on Yahoo Finance ↗
Keywords
TSMCNVDAsemiconductorsearningsartificial intelligence
Open a keyword to see other news on the same topic.
Related tickers and likely impact
NVDA
▲ Likely positiveNvidia
Relevance: high
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/16/2026 | 214.14 |
| Change that session | -1.42% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- 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.
- 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.
- 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.
- Samsung collaborates with TSMC for Nvidia’s custom HBM chips
Samsung Electronics is reportedly working with TSMC to use TSMC's 3nm process to produce base dies for Nvidia's next-generation custom HBM chips, according to the Seoul Economic Daily, marking the first time Samsung has collaborated with TSMC at the HBM manufacturing stage. The base die integrates the memory controller previously housed on the GPU, and together with a 60% smaller physical layer, it is said to deliver up to 30% more memory bandwidth and 15% lower power consumption than standard HBM4E. Sources cited TSMC's yield on this process at over 90%, versus about 60% for Samsung's comparable 2nm process, supporting consolidation of production at TSMC. Demand is rising, with UBS projecting about 61.5 billion gigabits of HBM needed next year, up 91%, while supply is expected to fall short by about 10%.
- 1 Reason TSMC Stock Could Rally After Its Record Quarter
TSMC shares are up about 39% year to date as of Oct. 15, 2026, versus about 13% for the S&P 500, after the chipmaker reported record third-quarter revenue of $46.7 billion, up 41% from a year earlier. High-performance computing, which includes AI data center chips, made up 68% of sales. Management expects fourth-quarter revenue of $52.3 billion to $54.3 billion, about 58% growth at the midpoint, and Wei said demand for AI chips is still far above TSMC's supply capability. The company is planning cautiously for 2027 amid macroeconomic uncertainty, and rising component prices could weigh on its smartphone business, which made up 21% of third-quarter revenue. The article argues the stock trades at about 19 times analysts' 2027 earnings estimates, while earnings are expected to grow 38% a year, making it an attractive valuation.
- 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.
Related markets
Latest news
- Amazon (AMZN) Stock Costs $250 a Share. Here's Why I'd Still Buy It.
The article argues that Amazon, trading at about $250 a share, is still worth buying for the author, who would buy it if he did not already own it. The main reason is that the stock looks appealingly valued: its forward P/E of about 24 is well below its five-year average of 39, while its price-to-sales ratio of 3.6 is slightly above the five-year average of 3. Amazon ranked fourth in the 2026 Kantar BrandZ Global Top 100, with a brand value of $1 trillion, and its shares have averaged annual gains of 22% over the past 15 years. The author stresses that a stock's absolute price means little on its own, so investors should compare it with earnings and sales and research each company in depth.
- Amazon Just Made Its AI Chips Easier to Use. Should Nvidia Investors Be Worried?
Amazon announced TorchNeuron, a free open-source tool that lets developers run existing PyTorch code on its Trainium chips with minimal changes, with a public beta due on Oct. 20. This challenges a key part of Nvidia's moat, because switching away from CUDA typically carries large costs in time and labor. However, the tool only covers PyTorch work, custom CUDA code will not port easily, and the release is still in beta, with the ease-of-switching claims coming from Amazon itself. Google is also developing a similar tool, TorchTPU. The author sees it as a chink in Nvidia's narrative and does not expect a major near-term effect on order flow or pricing power, but says the market may no longer pay quite the same premium for Nvidia stock.
- Cisco Systems (CSCO) Unveiled 102.4T AI Networking Platforms
Cisco Systems unveiled new AI networking platforms built on Silicon One P200, G300 and G302 switching chips, with 51.2T and 102.4T systems. It also introduced 1.6T optical modules and integrated liquid cooling aimed at high-density AI data centers, and disclosed a collaboration with NVIDIA, TE Connectivity and Amphenol to co-develop a 400Gb/s per lane USFP optical module and open specification. The company has a market cap of US$423.4b. The article says the launch supports Cisco's position as an AI networking provider competing with Arista and Juniper, but the richer hardware mix adds to margin pressure that has already contributed to non-GAAP gross margin compression.
- J.P. Morgan Stays Top of Extel’s All-America Equities Research Table
Extel's 55th annual All-America Research Team survey ranks J.P. Morgan first in the research team table with 47 published positions, followed by BofA Securities with 44 and Morgan Stanley with 43. UBS posted the largest gain in positions, reaching 42 and climbing to fourth place. In the analyst leaders table, Jefferies takes first place with 43 positions, while UBS leads Extel's weighted ranking of research teams ahead of J.P. Morgan and Evercore ISI. The results reflect the views of 4,451 portfolio managers and analysts at 1,608 institutions across 60 sectors, with 129,919 votes counted. The number of participating institutions fell from 1,705 in 2025, but more firms now sit in the highest commission bands, rising to 89 from 82.
- Visa, Mesh partner to enable crypto spending at 175M merchant locations
Visa and crypto payments network Mesh have partnered so users can spend cryptocurrency and stablecoin balances directly from participating digital wallets at merchants on Visa's network, without transferring funds to a bank account or using a separate crypto card. Merchants receive payments through Visa's existing network without changing their checkout systems. The network covers more than 175 million merchant locations in over 200 countries and territories, and participating wallets and launch dates will be announced later. Mesh will handle funding and conversion between crypto, stablecoins and fiat, as well as onboarding and KYC requirements. The partnership follows Mesh's September integration with Bybit Pay and its $75 million raise in January at a $1 billion valuation.
- Top 3 Founder Led Stocks To Watch In October 2026
The article presents three founder-led stocks from a screen: monday.com, Palantir Technologies and Figure Technology Solutions. monday.com has revenue of about US$1.37b and a market cap of US$3.8b. Palantir earns US$3.21b from Government customers and US$2.95b from Commercial clients, with a market cap of US$447.04b. Figure Technology Solutions reports US$619 million of revenue and a market cap of US$6.1b. The article argues that founder ownership can align leadership with long-term shareholder interests, but each stock depends on key assumptions to watch, such as customer expansion, pricing power or the pace of blockchain adoption. The full screen surfaced 26 more businesses with similarly strong founder ownership.
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.