Taiwan Semiconductor Manufacturing (NYSE:TSM) Issues Quarterly Earnings Results

Taiwan Semiconductor Manufacturing (NYSE:TSM) announced its quarterly earnings results on Thursday. The semiconductor company reported $4.60 EPS for the quarter, beating the consensus estimate of $4.45 by $0.15, Zacks reports. Taiwan Semiconductor Manufacturing had a net margin of 50.31% and a return on equity of 39.25%.

Here are the key takeaways from Taiwan Semiconductor Manufacturing’s conference call:

• Strong third-quarter performance: Revenue rose 17.6% sequentially to $46.7 billion, above guidance, driven by leading-edge demand; advanced technologies represented 79% of wafer revenue.
• TSMC forecast fourth-quarter revenue of $52.3 billion-$54.3 billion, implying approximately 58% year-over-year growth at the midpoint, and raised its 2026 revenue growth outlook to around 44% in U.S. dollar terms.
• Management described AI demand as extremely robust, with growing adoption of agentic AI, AI CPUs, accelerators, networking chips, and open-source models. TSMC believes demand remains well above available supply and expects AI-related growth could exceed its prior mid-to-high-50% CAGR outlook.
• TSMC is accelerating capacity expansion, maintaining 2026 capital expenditures of $60 billion-$64 billion and signaling significantly higher investment in 2026-2028. N2 capacity is expected to more than double in 2027, while additional N3 fabs are planned in Taiwan, the U.S., and Japan.
• Profitability faces pressure from the steep N2 ramp and higher-cost overseas fabs; gross margin fell to 66.4% in the third quarter and is guided to about 66% in the fourth quarter, with overseas-fab dilution expected to widen to 3%-4% in the coming years. Management also flagged weakness in consumer and price-sensitive markets due to rising component costs and macroeconomic uncertainty.

Taiwan Semiconductor Manufacturing Stock Down 3.2%

TSM opened at $430.69 on Thursday. Taiwan Semiconductor Manufacturing has a 52 week low of $266.82 and a 52 week high of $487.47. The business has a 50 day moving average price of $434.77 and a two-hundred day moving average price of $416.47. The company has a quick ratio of 2.25, a current ratio of 2.46 and a debt-to-equity ratio of 0.14. The company has a market cap of $2.23 trillion, a PE ratio of 31.07, a P/E/G ratio of 0.92 and a beta of 1.37.

Taiwan Semiconductor Manufacturing Cuts Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, January 7th. Shareholders of record on Thursday, December 10th will be paid a dividend of $1.0854 per share. The ex-dividend date of this dividend is Thursday, December 10th. This represents a $4.34 annualized dividend and a yield of 1.0%. This is a drop from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $1.1136. Taiwan Semiconductor Manufacturing’s dividend payout ratio (DPR) is currently 24.75%.

Insider Buying and Selling at Taiwan Semiconductor Manufacturing

In related news, VP Bor-Zen Tien purchased 3,000 shares of the business’s stock in a transaction dated Tuesday, July 21st. The stock was acquired at an average price of $74.39 per share, for a total transaction of $223,170.00. Following the completion of the purchase, the vice president directly owned 4,000 shares of the company’s stock, valued at $297,560. This trade represents a 300.00% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, VP Lipen Yuan purchased 1,000 shares of the firm’s stock in a transaction that occurred on Tuesday, August 18th. The shares were bought at an average cost of $74.50 per share, with a total value of $74,500.00. Following the completion of the acquisition, the vice president owned 6,000 shares of the company’s stock, valued at approximately $447,000. This trade represents a 20.00% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. In the last ninety days, insiders have purchased 16,043 shares of company stock worth $1,185,746. 1.11% of the stock is currently owned by insiders.

Analyst Ratings Changes

Several analysts have recently weighed in on the stock. TD Cowen boosted their price objective on shares of Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the stock a “hold” rating in a research report on Friday, July 17th. Barclays increased their target price on shares of Taiwan Semiconductor Manufacturing from $650.00 to $665.00 and gave the company an “overweight” rating in a research report on Tuesday, October 6th. Zacks Research raised shares of Taiwan Semiconductor Manufacturing from a “hold” rating to a “strong-buy” rating in a research report on Thursday, July 16th. DA Davidson lifted their price target on shares of Taiwan Semiconductor Manufacturing from $450.00 to $500.00 and gave the stock a “buy” rating in a research note on Friday, July 17th. Finally, Weiss Ratings lowered shares of Taiwan Semiconductor Manufacturing from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, October 6th. Three research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and two have assigned a Hold rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of “Buy” and an average target price of $528.22.

Trending Headlines about Taiwan Semiconductor Manufacturing

Here are the key news stories impacting Taiwan Semiconductor Manufacturing this week:

• Positive Sentiment: TSMC posted record third-quarter net profit of approximately NT$763 billion, up 68.7% year over year and above the NT$746.3 billion analyst estimate. Revenue also exceeded expectations, supported by strong demand for advanced AI and high-performance-computing chips. TSMC posts record profit for a sixth straight quarter
• Positive Sentiment: Management issued fourth-quarter revenue guidance of $52.3 billion to $54.3 billion, well above the roughly $48.8 billion consensus estimate. Advanced technologies accounted for about 79% of wafer sales, reinforcing TSMC’s position in leading-edge semiconductor manufacturing. TSMC beats estimates as AI demand drives sales growth
• Positive Sentiment: Chief Executive Officer C.C. Wei said he sees no indication of a slowdown, suggesting that AI infrastructure demand remains robust despite concerns that technology companies may be approaching the limits of their spending boom. TSMC CEO sees no sign of a slowdown
• Neutral Sentiment: TSMC also has an approximately $2 billion agreement with GlobalFoundries to manufacture U.S. silicon interposers for advanced AI-chip packaging. The deal supports supply-chain diversification but is unlikely to materially affect near-term earnings.
• Negative Sentiment: Despite the earnings beat, investors appear concerned that much of the AI-driven growth was already reflected in TSM’s valuation. Shares trade near a historically elevated earnings multiple and below their recent high, increasing the risk of profit-taking when results fail to dramatically exceed already aggressive expectations. Why TSM stock is sliding after earnings
• Negative Sentiment: A hotter-than-expected inflation reading and slowing revenue growth reported by Anthropic extended a wider technology and AI-stock selloff. Higher interest-rate concerns and scrutiny of the enormous cost of AI infrastructure are weighing on semiconductor shares, including TSM.

Taiwan Semiconductor Manufacturing Company Profile

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), commonly known as TSMC, is a Taiwan-based semiconductor manufacturer and the world’s largest dedicated semiconductor foundry. Founded in 1987 by Morris Chang, the company pioneered the pure-play foundry model, producing chips designed by other companies rather than selling products under its own semiconductor brand.

TSMC manufactures a broad range of integrated circuits, including advanced logic chips used in high-performance computing, smartphones, automotive systems, communications equipment, and consumer electronics.