Taiwan Semiconductor (TSM) Stock: Q4 Earnings Expected to Hit Record on AI Chip Demand

TLDR

• TSMC reports Q4 earnings Thursday with analysts forecasting 27% profit growth to T$475.2 billion
• Fourth-quarter revenue increased 20.45% driven by 3-nanometre chip production for iPhone 17 and AI servers
• 2026 revenue growth forecast raised to 25-30% from previous 22-26% estimate
• AI server accelerator market expected to grow 78% year-over-year in 2026
• Wall Street consensus shows $2.85 earnings per share, up 30% year-over-year

TSMC reports fourth-quarter earnings Thursday with analysts expecting net profit of T$475.2 billion. The forecast represents a 27% increase from last year.

Taiwan Semiconductor Manufacturing Company Limited, TSM

Wall Street expects earnings of $2.85 per share. Revenue is forecast at $32.74 billion, up 22% year-over-year.

The company posted fourth-quarter revenue of NT$1.05 trillion last week. That marked a 20.45% increase from the prior year.

Revenue Growth Forecast Increases for 2026

Research firm IDC raised its 2026 revenue growth forecast for TSMC to 25-30%. The previous estimate was 22-26%.

The AI server accelerator market drives the higher forecast. That market is projected to grow 78% year-over-year in 2026.

Galen Zeng at IDC cited explosive growth in AI server accelerator manufacturing. The company’s 2-nanometre node technology will contribute to growth.

Full utilization of 3-nanometre production capacity powered fourth-quarter results. Apple’s A19 chip for iPhone 17 and AI accelerators drove demand.

Citi analyst Laura Chen placed an upside catalyst watch on TSM stock. She maintains a Buy rating with a NT$2,450 price target.

Chen expects strong demand for advanced process nodes. Data center and AI customers continue to order chip packaging services.

Analyst Price Targets and Margin Outlook

Bernstein raised its TSM stock price target to $330 from $290. The firm maintains an Outperform rating.

Bernstein increased its chip-on-wafer-on-substrate capacity estimate to 125,000 wafers per month by end of 2026. That capacity supports Nvidia’s Blackwell and Rubin platforms.

The firm expects TSMC revenue to grow 23% in 2026 and 20% in 2027.

Shay Boloor at Futurum Equities noted AI demand is accelerating. TSMC gains market share at the leading edge where competitors struggle.

However, faster overseas factory expansion could affect margins. New facilities might dilute margin gains from 2-nanometre technology.

TSMC is investing $165 billion in Arizona chip factories. U.S. Secretary of Commerce Howard Lutnick said more investment is planned.

Taiwan’s exports to the U.S. face a 20% tariff. However, chips are excluded from those tariffs.

TSM stock gained 44.2% last year. The broader Taiwan market rose 25.7%.

Options traders expect a 5.34% move in either direction after earnings. The earnings call is scheduled for 0600 GMT Thursday.

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