TSMC Jumps on Strong Q4 as AI Chip Demand Surges
Faizan Farooque
Mon, January 19, 2026 at 11:56 AM EST
1 min read
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This article first appeared on GuruFocus.
Taiwan Semiconductor Manufacturing Co. (TSM, Financials) performed well and looked ahead. The world's largest contract chipmaker's fourth-quarter profit jumped 35%, exceeding expectations, due to rising Nvidia and Apple AI processor demand.The quarter ending Dec. 31, 2025, TSMC earned NT$505.7 billion, or NT$19.50 per share. Revenue exceeded expectations by 25.5% to NT$1.046 trillion. Business reported 77% of wafer revenue from 7 nanometer and smaller AI and 5G circuits.This shift to advanced processors helped TSMC. On the earnings call, management said our high performance computing business continues to drive growth, supported by strong AI demand.TSMC expects first-quarter 2026 sales of $34.6 billion to $35.8 billion and a 63%65% gross margin. Most of its $56 billion investment this year will go to 2 nanometer technology. Management expects 30% annual U.S. dollar revenue growth.Analysts were upbeat after the report. Counterpoint Research's Jake Lai said TSMC's introduction of 2nm circuits and improved packaging puts the company in a strong position for 2026, but declining smartphone and PC demand could affect itAfter the findings, TSMC shares climbed more than 6% in pre market trading, demonstrating investor confidence that the company remains at the vanguard of the global AI chip boom.
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