Taiwan Semiconductor (TSM) Stock: Why Cathie Wood Just Bet $1.9M on This Chipmaker

TLDR

• Cathie Wood’s ARK Invest purchased 5,542 TSMC shares worth $1.89 million on January 16, 2026.
• TSMC reported Q4 FY25 net income of $16 billion, up 35% year-over-year, beating analyst estimates.
• The chipmaker forecasts 2026 capital expenditure between $52 billion and $56 billion, far exceeding 2025’s $40.9 billion.
• TSMC expects roughly 30% revenue growth for 2026, driven by strong AI chip demand from cloud companies.
• Wall Street analysts raised price targets following earnings, with BofA Securities setting a $470 target while maintaining a Buy rating.

Taiwan Semiconductor Manufacturing reported fourth-quarter results that beat Wall Street expectations by a wide margin. The company posted net income of NT$505.74 billion, or about $16 billion.

Taiwan Semiconductor Manufacturing Company Limited, TSM

That represents a 35% jump from the same period last year. Revenue climbed 25.5% year-over-year to NT$1.046 trillion, or $33.73 billion in U.S. dollar terms.

Diluted earnings came in at NT$19.50 per share, translating to $3.14 per ADR. Analysts had expected NT$469.13 billion in net profit, according to FactSet.

Following the earnings release, ARK Invest’s Cathie Wood made a move. Her firm bought 5,542 TSMC shares on January 16, valued at roughly $1.89 million.

The purchase signals confidence in TSMC’s position as a key supplier of advanced chips. Wood has been vocal about her bullish stance on AI-related semiconductor plays.

Capital Spending Plans Signal Growth Confidence

TSMC delivered guidance that caught Wall Street’s attention. The company forecasts capital expenditure between $52 billion and $56 billion for 2026.

That’s a substantial increase from 2025’s $40.9 billion in capex. The higher spending plan suggests management sees sustained demand for AI processors.

For the current quarter, TSMC expects revenue between $34.6 billion and $35.8 billion. That compares to $25.53 billion in the same period of 2025.

The company projects approximately 30% revenue growth for the full year 2026. CEO C.C. Wei told analysts the AI mega-trend remains strong.

Cloud computing companies are providing “strong signals” for demand. They’re requesting more capacity from TSMC to serve their customers.

The company’s business continues to benefit from orders for leading-edge process technologies. Major customers include Apple, Nvidia, and Qualcomm.

Analyst Price Targets Rise After Results

Morgan Stanley maintained its Buy rating and raised the price target 5% to NT$2,088. The firm cited better-than-expected margins and clearer earnings visibility.

The bank pointed to higher capital spending and improving margins as key strengths. Morgan Stanley kept TSMC as a “top pick” in its coverage.

TD Cowen analyst Krish Sankar lifted his price target to $370 from $325. He kept a Hold rating on the stock.

Sankar said the higher target reflects strong execution and improved long-term growth outlook. He noted that new chip node rollouts and overseas factory expansions could pressure margins.

BofA Securities analyst Brad Lin raised his price target to $470 from $430 with a Buy rating. Lin expects TSMC’s technology lead to support stronger pricing over the next few years.

He sees demand for advanced nodes staying solid. That should help sales grow faster than costs and push margins higher in 2026 and 2027.

TSMC shares climbed about 62% in 2025. The stock gained 60% over the past 12 months, including a 20% increase in the past month alone.

The American depositary receipts jumped 6% in early trading following the earnings report. Semiconductor equipment makers also rallied on the news.

TSMC has a Strong Buy consensus rating on TipRanks based on seven Buy ratings and one Hold. The average price target of $320.61 sits slightly below current trading levels.

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