TSMC Stock Up 6% on Q4 Beat, $56B AI Capex Signals Huge Demand

Taiwan Semiconductor Manufacturing Company (TSM) traded around $345 as of writing, a fresh high in premarket action, up more than 6%, as investors reacted to stronger-than-expected fourth-quarter earnings and an aggressive investment outlook tied to artificial intelligence demand.

The move followed a weaker prior session and helped lift U.S. stock futures, especially across chip and AI-linked names.

Fourth-Quarter Results Beat Wall Street Estimates

TSMC reported earnings of $3.14 per U.S. share on revenue of $33.73 billion for the December-ended quarter. Analysts had expected $2.90 per share on $33 billion in revenue. The company delivered a 35% year-over-year profit increase, reflecting sustained demand for advanced chips used in data centers and high-performance computing. 

Revenue rose sharply from $26.38 billion in the same quarter last year, underscoring the scale of the current expansion cycle. Management pointed to strong uptake of leading-edge manufacturing as the primary growth driver. Does this confirm that AI spending continues at pace? The numbers suggest so.

Advanced Chips Drive Revenue Mix

Chip shipments using 3-nanometer technology accounted for 28% of total wafer revenue during the quarter. Meanwhile, 5-nanometer products contributed 35%, and 7-nanometer chips added 14%. In total, advanced nodes defined as 7-nanometer and below represented 77% of wafer revenue.

Chief Financial Officer Wendell Huang said the company continues to see strong demand for its most advanced processes moving into the first quarter of 2026. This concentration highlights how deeply AI workloads shape semiconductor demand across major customers.

Massive Capex Signals Long-Term Confidence

TSMC announced plans to raise capital expenditures to between $52 billion and $56 billion in 2026, far above its $40.9 billion spending level in 2025. Chief Executive C.C. Wei said the decision followed months of coordination with major customers and reflects confirmed AI-driven demand rather than speculation.

Such spending levels place TSMC among the most aggressive investors in global manufacturing capacity. Markets often view capital plans as a forward-looking signal, and this forecast reinforced expectations of sustained chip orders from Big Tech.

The earnings release set off a rally across the semiconductor sector. Shares of ASML rose, while Nvidia rebounded after a prior decline. Other TSMC customers, including Apple, AMD, Broadcom, and Nvidia, gained support as investors reassessed AI exposure.

Suppliers also moved sharply higher. Applied Materials and Lam Research climbed more than 6% in premarket trading, reflecting optimism around equipment demand tied to new fabs and capacity expansions.

Record Highs and Analyst Reactions

TSM stock reached a new regular-session record high of $336 earlier in the week before extending gains following earnings. In premarket trading, shares touched levels near $348.

Barclays analyst Simon Coles reiterated an overweight rating and maintained a $380 price target on the U.S.-listed shares. He described the results as reinforcing the positive outlook for AI-driven semiconductor demand. Mizuho’s Jordan Klein noted that TSMC’s performance could shape sentiment for the broader semiconductor earnings season.

TSMC also confirmed plans to expand production capacity in Arizona with a fourth factory and its first advanced packaging facility in the United States. The company raised its quarterly dividend by 20% to 6 New Taiwan dollars per share, reinforcing shareholder returns alongside expansion.

Together, strong earnings, a heavy focus on advanced chips, and record investment plans positioned TSMC at the center of the AI supply chain as markets look ahead to 2026.