Taiwan Semiconductor Manufacturing (NYSE:TSM) Posts Earnings Results, Beats Estimates By $0.49 EPS

Taiwan Semiconductor Manufacturing (NYSE:TSM) issued its earnings results on Thursday, July 16th. The semiconductor company reported $4.31 earnings per share for the quarter, topping analysts’ consensus estimates of $3.82 by $0.49, Zacks reports. The business had revenue of $40.20 billion during the quarter, compared to the consensus estimate of $39.83 billion. Taiwan Semiconductor Manufacturing had a return on equity of 40.88% and a net margin of 50.31%.The firm’s revenue for the quarter was up 36% on a year-over-year basis. During the same period in the previous year, the company posted $2.47 earnings per share.

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

• TSMC reported Q2 revenue of $40.2 billion at the high end of guidance, with gross margin of 67.7% and strong demand driven by leading-edge process technologies.
• The company raised its full-year 2026 revenue growth outlook to slightly above 40% in U.S. dollar terms, citing exceptionally strong AI-related demand and broad customer support.
• TSMC increased its 2026 capital budget to $60 billion-$64 billion and announced an additional $100 billion investment in Arizona to expand 2nm-and-below logic and advanced packaging capacity.
• Management said the 2nm ramp will pressure margins by roughly 3-4 percentage points in the second half, and Q3 gross margin is expected to ease to about 66% at the midpoint due to this mix shift and overseas fab dilution.
• Executives emphasized that AI demand remains extremely robust, including emerging agentic AI use cases, and said they expect this trend to support strong multi-year growth across CPUs, GPUs, and other leading-edge chips.

Taiwan Semiconductor Manufacturing Stock Performance

Shares of NYSE:TSM traded down $7.81 during trading on Thursday, hitting $413.40. 3,575,890 shares of the company were exchanged, compared to its average volume of 13,983,794. The company has a market cap of $2.14 trillion, a PE ratio of 29.83, a P/E/G ratio of 0.99 and a beta of 1.36. The stock has a 50 day moving average of $427.76 and a 200 day moving average of $380.89. Taiwan Semiconductor Manufacturing has a 52-week low of $223.70 and a 52-week high of $479.00. The company has a debt-to-equity ratio of 0.16, a current ratio of 2.49 and a quick ratio of 2.31.

Taiwan Semiconductor Manufacturing Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, October 8th. Stockholders of record on Wednesday, September 16th will be given a dividend of $1.1136 per share. The ex-dividend date of this dividend is Wednesday, September 16th. This represents a $4.45 dividend on an annualized basis and a dividend yield of 1.1%. This is a boost from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $0.95. Taiwan Semiconductor Manufacturing’s payout ratio is currently 21.43%.

Insider Buying and Selling

In related news, VP Lipen Yuan acquired 1,000 shares of the company’s stock in a transaction that occurred on Monday, June 22nd. The shares were acquired at an average price of $79.19 per share, with a total value of $79,190.00. Following the acquisition, the vice president owned 5,000 shares of the company’s stock, valued at approximately $395,950. This trade represents a 25.00% increase in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. Also, VP Tzu-Sou Chuang sold 200,000 shares of the stock in a transaction dated Tuesday, May 19th. The stock was sold at an average price of $69.83, for a total value of $13,966,000.00. Following the sale, the vice president directly owned 2,495,165 shares in the company, valued at $174,237,371.95. This trade represents a 7.42% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last quarter, insiders have purchased 6,857 shares of company stock valued at $512,334. Corporate insiders own 1.11% of the company’s stock.

Hedge Funds Weigh In On Taiwan Semiconductor Manufacturing

Institutional investors have recently added to or reduced their stakes in the business. Quattro Advisors LLC bought a new position in Taiwan Semiconductor Manufacturing in the 4th quarter worth about $25,000. Resources Management Corp CT ADV bought a new position in Taiwan Semiconductor Manufacturing in the 2nd quarter worth about $32,000. Riggs Asset Managment Co. Inc. bought a new position in Taiwan Semiconductor Manufacturing in the 2nd quarter worth about $41,000. FWL Investment Management LLC increased its stake in Taiwan Semiconductor Manufacturing by 26.5% in the 2nd quarter. FWL Investment Management LLC now owns 253 shares of the semiconductor company’s stock worth $57,000 after acquiring an additional 53 shares during the last quarter. Finally, SWAN Capital LLC increased its stake in Taiwan Semiconductor Manufacturing by 65.7% in the 4th quarter. SWAN Capital LLC now owns 227 shares of the semiconductor company’s stock worth $69,000 after acquiring an additional 90 shares during the last quarter. 16.51% of the stock is currently owned by institutional investors.

Key Headlines Impacting Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: TSMC raised its 2026 revenue growth outlook to above 40%, citing surging AI demand and rapid progress on its 2-nanometer technology ramp. Article Title
• Positive Sentiment: Recent articles highlighted TSMC as a key beneficiary of the AI infrastructure boom, with record sales, strong profit growth, and pricing power helping support the long-term investment case. Article Title
• Neutral Sentiment: Commentary around AI infrastructure investing and major hedge fund tech picks continues to keep TSMC in the spotlight as a core supplier to the buildout, but these pieces are more thematic than company-specific. Article Title
• Neutral Sentiment: TSMC’s ongoing U.S. expansion and diversification efforts may strengthen its long-term supply chain resilience, though they also add complexity to the story. Article Title
• Negative Sentiment: Some recent coverage focused on margin pressure from TSMC’s heavy capital spending, U.S. expansion costs, and political pressure to shift more production to the United States. Article Title
• Negative Sentiment: Investors are also worried that rising AI-related capex and a slower near-term margin outlook could weigh on valuation, even after a blowout quarter. Article Title

Analysts Set New Price Targets

Several equities research analysts have recently commented on TSM shares. Zacks Research upgraded Taiwan Semiconductor Manufacturing from a “hold” rating to a “strong-buy” rating in a report on Thursday, July 16th. Bank of America boosted their price objective on Taiwan Semiconductor Manufacturing from $490.00 to $590.00 and gave the company a “buy” rating in a report on Wednesday, June 24th. Weiss Ratings downgraded Taiwan Semiconductor Manufacturing from a “buy (b-)” rating to a “hold (c+)” rating in a report on Monday, July 13th. Barclays boosted their price objective on Taiwan Semiconductor Manufacturing from $625.00 to $650.00 and gave the company an “overweight” rating in a report on Friday, July 17th. Finally, Needham & Company LLC upped their price target on Taiwan Semiconductor Manufacturing from $410.00 to $480.00 and gave the stock a “buy” rating in a report on Thursday, April 16th. Three investment analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating and two have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company currently has a consensus rating of “Buy” and a consensus price target of $490.00.

Taiwan Semiconductor Manufacturing Company Profile

Taiwan Semiconductor Manufacturing Company (TSMC) is a leading pure-play semiconductor foundry that provides wafer fabrication and related services to the global semiconductor industry. Founded in 1987 by Morris Chang and headquartered in Hsinchu, Taiwan, TSMC manufactures integrated circuits on behalf of fabless and integrated device manufacturers, offering contract chip production across a broad set of technologies and products.

TSMC’s service offering covers logic and mixed-signal process technologies, specialty processes for radio-frequency, power management and embedded memory, and advanced nodes used in mobile, high-performance computing and AI applications.