Taiwan Semiconductor (TSM) Stock: Cathie Wood Adds $1.9M Stake Post-Earnings

TLDR

• TSMC reported Q4 earnings of $16 billion, representing a 35% increase from the previous year.
• Cathie Wood’s ARK Invest acquired 5,542 shares valued at $1.89 million after the earnings release.
• The company forecasts capital spending of $52-56 billion in 2026, well above 2025’s $40.9 billion.
• Analysts from Morgan Stanley, TD Cowen, and BofA Securities raised their price targets following the results.
• TSMC projects approximately 30% revenue growth for 2026 based on AI chip demand.

Taiwan Semiconductor Manufacturing announced fourth-quarter earnings that beat analyst projections. The chipmaker posted net income of $16 billion, up 35% compared to the same quarter last year.

Taiwan Semiconductor Manufacturing Company Limited, TSM

Revenue climbed to $33.73 billion in the quarter, a 25.5% increase year-over-year. Earnings per ADR reached $3.14, topping Wall Street’s consensus estimate.

Cathie Wood’s ARK Invest responded to the results with a purchase. The firm bought 5,542 shares worth roughly $1.89 million on January 16.

The move demonstrates confidence in TSMC’s position as a leading chip manufacturer. The company supplies advanced processors to major tech players including Apple, Nvidia, and Qualcomm.

Record Capital Spending on Horizon

TSMC provided guidance that exceeded market expectations. The company plans capital expenditures between $52 billion and $56 billion for 2026.

This marks a substantial increase from the $40.9 billion spent in 2025. The elevated spending reflects strong demand projections for AI-related chips.

First-quarter revenue is expected between $34.6 billion and $35.8 billion. That compares to $25.53 billion in the first quarter of 2025.

Management forecasts around 30% revenue growth for the full year. CEO C.C. Wei stated that cloud computing companies are requesting increased capacity.

The AI trend continues showing strength across multiple sectors. Demand is coming from consumers, enterprises, and government entities.

Analyst Community Raises Targets

Morgan Stanley maintained its Buy rating and lifted the price target 5% to NT$2,088. The firm pointed to improved margins and stronger earnings visibility.

TD Cowen’s Krish Sankar increased his price target to $370 from $325. He maintained a Hold rating while acknowledging strong execution from management.

Sankar noted the improved long-term growth outlook driven by AI and cloud demand. He cautioned that overseas expansion could impact margins over time.

BofA Securities analyst Brad Lin raised his target to $470 from $430. He kept a Buy rating on the stock.

Lin expects TSMC’s technology leadership to support higher pricing. Advanced chip demand should help sales outpace costs through 2027.

Market Response and Outlook

TSMC shares rallied 6% in early trading following the earnings announcement. The stock has gained 62% in 2025 and 60% over the past year.

Semiconductor equipment manufacturers also benefited from the news. ASML Holding rose 6% while Lam Research gained 5%.

TipRanks data shows a Strong Buy consensus with seven Buy ratings and one Hold. The average price target sits at $320.61.

TSMC’s business momentum reflects strong orders for leading-edge manufacturing processes. CFO Wendell Huang indicated continued robust demand for advanced technologies in the current quarter.

The company’s U.S. expansion continues progressing. TSMC has pledged $165 billion in American investment for three new semiconductor facilities.

Cloud providers are delivering strong demand signals for additional capacity. The company sees rising AI adoption driving long-term growth opportunities across its customer base.

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