TLDR
- TSMC posted Q4 net income of $16 billion, beating estimates by 35% year-over-year growth.
- ARK Invest purchased $1.89 million worth of TSMC shares following the earnings announcement.
- The chipmaker plans to spend $52-56 billion on capital expenditures in 2026, up from $40.9 billion in 2025.
- Wall Street analysts increased price targets, with BofA Securities raising its target to $470.
- TSMC expects 30% revenue growth in 2026 driven by AI chip demand.
Taiwan Semiconductor Manufacturing delivered fourth-quarter results that exceeded Wall Street forecasts. The company reported net income of $16 billion, marking a 35% increase from the prior year.
Taiwan Semiconductor Manufacturing Company Limited, TSM
Revenue reached $33.73 billion in U.S. dollar terms, up 25.5% year-over-year. Diluted earnings per ADR came in at $3.14, surpassing analyst expectations of $3.01.
ARK Invest moved quickly after the results. Cathie Wood’s firm purchased 5,542 shares worth approximately $1.89 million on January 16.
The buy reflects growing confidence in TSMC’s role supplying advanced chips to tech giants. The company manufactures processors for Apple, Nvidia, and Qualcomm.
Massive Spending Increase Planned
TSMC announced capital expenditure guidance that surprised investors. The company expects to spend between $52 billion and $56 billion in 2026.
That represents a jump from 2025’s $40.9 billion in capex. The increased spending signals management’s belief in sustained AI processor demand.
CEO C.C. Wei told analysts the AI trend remains robust. Cloud computing companies are requesting additional capacity to meet customer needs.
For the first quarter, TSMC forecasts revenue between $34.6 billion and $35.8 billion. That compares to $25.53 billion in the same period last year.
The company projects roughly 30% revenue growth for the full year. Strong demand for leading-edge process technologies continues driving the business.
Wall Street Upgrades Price Targets
Morgan Stanley raised its price target 5% to NT$2,088 while maintaining a Buy rating. The firm highlighted better-than-expected margins and clear earnings visibility.
TD Cowen analyst Krish Sankar lifted his target to $370 from $325. He kept a Hold rating, citing strong execution and improved growth outlook.
BofA Securities analyst Brad Lin increased his target to $470 from $430 with a Buy rating. Lin expects TSMC’s technology advantage to support premium pricing.
He anticipates demand for advanced nodes will remain solid. Sales should grow faster than costs, pushing margins higher through 2027.
Stock Performance and Consensus
TSMC shares have climbed 62% in 2025. The stock gained 60% over the past 12 months, including a 20% rally in the last month.
American depositary receipts jumped 6% in early trading after the earnings release. Semiconductor equipment makers also rallied on the news.
TipRanks shows a Strong Buy consensus rating based on seven Buy ratings and one Hold. The average analyst price target stands at $320.61.
The company’s U.S. expansion plans continue advancing. TSMC has committed $165 billion to American investment, including three new semiconductor plants.
Cloud providers are showing strong demand signals. Rising AI adoption across consumers, enterprises, and governments supports the growth outlook.
TSMC’s fourth-quarter performance was supported by orders for its most advanced manufacturing processes. CFO Wendell Huang said the company expects continued strong demand for leading-edge technologies in the current quarter.
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