TSMC's record quarterly profit lifts chip stocks and renews AI optimism

Businessinsider reported that Taiwan Semiconductor Manufacturing Company posted fourth-quarter results and a record quarterly profit, sending chip stocks higher as traders cheered fresh signs of AI strength.

TSMC blew past analyst estimates on multiple metrics, reporting a record 35% quarterly profit. Revenue rose 20% year over year, while both net income and diluted earnings per share surged more than 35%. "Our business in the fourth quarter was supported by strong demand for our leading-edge process technologies," said TSMC CFO and senior VP Wendell Huang. "Moving into first quarter 2026, we expect our business to be supported by continued strong demand for our leading-edge process technologies."

The company also revealed capital spending could rise by as much as 37% to $56 billion this year and is expected to rise even more over the coming two years; analysts had expected $46 billion. The news sent AI chip stocks higher in premarket trading — TSMC +5%, ASML +7%, Micron Technology +3%, Broadcom +3%, Arm Holdings +3%, and Nvidia +1.5% — and ASML's market cap surged past $500 billion on Thursday. As the company is seen as a bellwether for its industry, Wall Street will likely take it as an indicator that the AI trade is as strong as ever.

Key Topics

Business, Tsmc, Asml, Nvidia, Broadcom, Micron Technology