Taiwan Semiconductor Manufacturing Stock Jumps On Robust AI Chip Demand. Is It Time to Sell or Double Up on the Stock?

• TSMC erstwhile again produced beardown gross and net growth.

• The institution boosted its capex fund for 2026, fixed the expanding request it's seeing.

• The banal is inactive attractively valued, adjacent aft a beardown run.

• 10 stocks we similar amended than Taiwan Semiconductor Manufacturing ›

Taiwan Semiconductor Manufacturing (NYSE: TSM) shares jumped aft the semiconductor declaration shaper erstwhile again reported beardown quarterly results and issued an upbeat outlook. The banal is up astir 70% implicit the past year, arsenic of this writing.

Given its beardown performance, let's look astatine its caller results to spot whether present is the clip to instrumentality profits, oregon whether investors should treble up connected buying the stock.

Demand for artificial quality (AI) chips remains insatiable. This tin beryllium seen not lone successful TSMC's beardown gross growth, but successful the information that it besides projected that its superior expenditure (capex) this twelvemonth would emergence to betwixt $52 cardinal and $56 billion. That was mode up of expert expectations for conscionable shy of $41 cardinal successful 2026 capex, and demonstrates the company's condemnation that the ongoing AI information halfway buildout volition proceed agelong into the future. Management said that starring unreality computing companies are signaling that their beardown spending volition continue, and that customers are continually seeking much capableness to assistance conscionable their increasing demand.

TSMC is the wide person successful manufacturing precocious process nodes. Shrinking node sizes to acceptable much transistors onto a semiconductor is captious for expanding processing powerfulness and vigor efficiency. As competitors person struggled to execute precocious yields astatine scale, TSMC has secured a near-monopoly successful the accumulation of cutting-edge chips. In the 4th quarter, nodes 7 nanometers (nm) and nether accounted for 77% of its revenue, up from 74% a twelvemonth ago. Its newest 3-nm technology, meanwhile, made up 28% of its full wafer revenue, expanding from 26% a twelvemonth ago.

High-performance computing (HPC) accounted for 55% of its gross successful the 4th and 58% for the afloat year. 2025 HPC gross climbed 48%. Smartphone gross made up 32% of its quarterly gross and 29% for the year. Its smartphone gross was up 11% successful 2025.

Overall, the company's Q4 gross jumped astir 26% to $33.7 billion, oregon astir 21% successful section currency. Its net per American depositary receipt (ADR) surged 40% to $3.14 from $2.24 a twelvemonth ago, portion its net per stock (EPS) successful section currency climbed 35%.

Gross borderline expanded successful the quarter, rising 330 ground points to 62.3%, and operating margins roseate 500 ground points to 54%. Both numbers were good up of TSMC's anterior forecast, with it forecasting a gross borderline of betwixt 59% to 61% and an operating borderline betwixt 49% to 51%. TSMC has talked astir overseas enlargement yet negatively affecting its gross margins, but it forecast first-quarter gross margins to beryllium a robust 63% to 65% and operating margins successful a scope of 54% to 56%.