TSMC

TSM

Market cap $1.88T

NVDA's surging AI-driven growth, strong margins and lower valuation vs. TSMC position it as the more attractive semiconductor stock right now.

The S&P 500, Nasdaq and Russell 2000 hit new highs this week amid continued Iran optimism. Goldman, Netflix, Taiwan Semiconductor were key earnings.

Yesterday's TSMC earnings call was yet another confirmation that the AI momentum right now is a one-way street: up and to the right. TSMC's revenue from the most advanced nodes (7 nm or below), where they are a de facto monopoly, is now almost three-quarters of their revenue. It should be no surprise that TSMC revenue estimates continue to go higher.

Amazon's artificial intelligence chip business is booming. Taiwan Semiconductor is the dominant chipmaker for the AI build-out.

TSM tops Q1 estimates with 64% EPS growth and 40% revenue surge, driven by strong AI and HPC demand, while guiding higher for Q2.

Strong results and upgraded guidance mean less to me when the share price drops anyway, especially with the rest of the market clearly favoring risk. AI demand remains strong, 2026 U.S. dollar revenue guidance was riased above 30%, and AI accelerator growth still points toward a higher-50s CAGR. I am not upgrading my buy rating to a strong buy, as I believe the margin normalization may not be fully priced in.

Taiwan Semiconductor Manufacturing Company delivered another robust quarter with Q1 revenue up 6.4% QoQ and gross margins exceeding 66%. Is that enough to keep investors excited? TSM's N3 node ramped to 25% of wafer revenue, supporting margin strength, but steep capacity constraints are driving customers to rivals like Samsung and Intel. CapEx is expected near the top of guidance through 2026, but new capacity faces multi-year delays, raising concerns about potential market share losses. Plus, margins could also be peaking?

Taiwan Semiconductor Manufacturing Company Limited delivered Q1 FY2026 results with 58% net profit growth and 41% revenue growth, raising its FY2026 outlook to 30%+ revenue growth. TSMC's high-capacity utilization, strong pricing power in 2nm/3nm nodes, and 66.2% gross margins are driven by AI chip demand, especially from U.S. datacenter clients. CapEx guidance narrowed to the high end of $52–$56 billion, signaling locked-in customer prepayments and fierce competition for 2027–28 capacity.

Taiwan Semiconductor Manufacturing Company Limited delivered a spectacular earnings beat, with gross margin reaching 66.2% and robust guidance for further expansion. TSM's margin strength is driven by surging demand in advanced computing, particularly AI, and effective cost controls, despite overseas fab expansion and 2nm ramp-up pressures. Management proactively addresses supply chain and geopolitical risks, maintaining operational resilience and a strong balance sheet with more cash than liabilities.

Taiwan Semiconductor Manufacturing Company delivered robust Q1 results, beating revenue and EPS estimates and showcasing exceptional 41% year-over-year revenue growth. TSM's growth is powered by AI-driven demand, especially in high-performance computing, with advanced 3 nm and 5 nm processes fueling margin expansion and pricing power. Operating profit surged 62%, and net profit rose 65% in USD, while free cash flow grew 20% despite heavy capital expenditures to expand capacity.