TLDR
- TSMC delivered Q4 net income of $16 billion, surpassing estimates with 35% year-over-year growth.
- ARK Invest purchased $1.89 million in TSMC shares on January 16 following the earnings report.
- The chipmaker forecasts 2026 capital expenditures of $52-56 billion versus $40.9 billion in 2025.
- Multiple analysts raised price targets, with BofA Securities setting a $470 target.
- Revenue is expected to grow 30% in 2026 driven by strong AI processor demand.
Taiwan Semiconductor Manufacturing reported fourth-quarter numbers that sailed past expectations. The company generated net income of $16 billion, a 35% jump from the prior-year period.
Taiwan Semiconductor Manufacturing Company Limited, TSM
Revenue totaled $33.73 billion, climbing 25.5% compared to last year’s fourth quarter. Earnings per ADR hit $3.14, beating analyst forecasts.
ARK Invest made its move shortly after the announcement. Cathie Wood’s firm acquired 5,542 shares valued at approximately $1.89 million.
The purchase signals continued belief in TSMC’s dominance in advanced chip manufacturing. The company produces processors for tech leaders like Apple, Nvidia, and Qualcomm.
Spending Plans Point to Growth Confidence
TSMC unveiled capital expenditure guidance that caught investor attention. The company expects to invest $52 billion to $56 billion during 2026.
That’s a sharp increase from the $40.9 billion allocated in 2025. The higher spending plan reflects management’s optimism about sustained chip demand.
For the current quarter, TSMC anticipates revenue ranging from $34.6 billion to $35.8 billion. Last year’s first quarter brought in $25.53 billion.
The company projects about 30% revenue growth for the full year ahead. CEO C.C. Wei told analysts that AI demand remains strong across multiple sectors.
Cloud computing providers are signaling robust needs for additional capacity. The company sees adoption growing among consumers, businesses, and government organizations.
CFO Wendell Huang stated that leading-edge process technologies continue driving business performance. The company expects this trend to persist through the first quarter.
Analyst Community Shows Confidence
Morgan Stanley kept its Buy rating and boosted the price target 5% to NT$2,088. The firm cited stronger margins and improved earnings clarity.
The bank highlighted increased capital spending and margin improvements as positive indicators. Morgan Stanley maintains TSMC as a top investment choice.
Krish Sankar at TD Cowen raised his price target to $370 from $325. He maintained a Hold rating on the shares.
Sankar credited strong operational execution and an enhanced long-term growth trajectory. He warned that new manufacturing facilities overseas might pressure margins.
BofA Securities analyst Brad Lin lifted his target to $470 from $430 with a Buy rating. Lin anticipates TSMC’s technological edge will enable premium pricing.
He expects solid demand for advanced manufacturing nodes. This should allow revenue to outpace costs, expanding margins in 2026 and 2027.
Trading Activity and Analyst Views
TSMC shares jumped 6% in early trading after the earnings release. The stock has surged 62% during 2025 and 60% over the trailing twelve months.
Semiconductor equipment companies also rallied on the news. ASML Holding climbed 6% while Lam Research added 5%.
TipRanks shows a Strong Buy consensus based on seven Buy recommendations and one Hold. The average analyst price target stands at $320.61.
The company’s American expansion continues developing. TSMC has committed $165 billion toward U.S. investments, including three semiconductor manufacturing plants.
Strong demand signals from major cloud providers support the growth outlook. Orders for the most advanced chip technologies continue providing momentum for the business heading into 2026.
