Taiwan Semiconductor Manufacturing (NYSE:TSM) Issues Earnings Results, Beats Estimates By $0.46 EPS

Taiwan Semiconductor Manufacturing (NYSE:TSM) announced its quarterly earnings data on Thursday. The semiconductor company reported $4.28 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $3.82 by $0.46, FiscalAI reports. Taiwan Semiconductor Manufacturing had a net margin of 46.97% and a return on equity of 36.81%. The business had revenue of $39.89 billion for the quarter, compared to analysts’ expectations of $39.85 billion.

Here are the key takeaways from Taiwan Semiconductor Manufacturing’s conference call:

• TSMC reported Q2 revenue of $40.2 billion at the high end of guidance, with gross margin of 67.7% and strong demand driven by leading-edge process technologies.
• The company raised its full-year 2026 revenue growth outlook to slightly above 40% in U.S. dollar terms, citing exceptionally strong AI-related demand and broad customer support.
• TSMC increased its 2026 capital budget to $60 billion-$64 billion and announced an additional $100 billion investment in Arizona to expand 2nm-and-below logic and advanced packaging capacity.
• Management said the 2nm ramp will pressure margins by roughly 3-4 percentage points in the second half, and Q3 gross margin is expected to ease to about 66% at the midpoint due to this mix shift and overseas fab dilution.
• Executives emphasized that AI demand remains extremely robust, including emerging agentic AI use cases, and said they expect this trend to support strong multi-year growth across CPUs, GPUs, and other leading-edge chips.

Taiwan Semiconductor Manufacturing Trading Down 0.2%

Shares of NYSE TSM opened at $419.43 on Thursday. The firm has a 50 day moving average price of $427.18 and a two-hundred day moving average price of $377.06. The stock has a market cap of $2.18 trillion, a P/E ratio of 34.89, a price-to-earnings-growth ratio of 1.05 and a beta of 1.36. Taiwan Semiconductor Manufacturing has a 52-week low of $223.70 and a 52-week high of $479.00. The company has a debt-to-equity ratio of 0.16, a quick ratio of 2.31 and a current ratio of 2.49.

Taiwan Semiconductor Manufacturing Increases Dividend

The firm also recently announced a quarterly dividend, which will be paid on Thursday, October 8th. Shareholders of record on Wednesday, September 16th will be issued a dividend of $1.1136 per share. This represents a $4.45 dividend on an annualized basis and a yield of 1.1%. The ex-dividend date of this dividend is Wednesday, September 16th. This is a positive change from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $0.95. Taiwan Semiconductor Manufacturing’s payout ratio is presently 24.71%.

Key Taiwan Semiconductor Manufacturing News

Here are the key news stories impacting Taiwan Semiconductor Manufacturing this week:

• Positive Sentiment: TSMC posted record Q2 profit, beat revenue and profit estimates, and said AI demand is still driving growth. Reuters: TSMC Q2 profit jumps 77% to record, far surpasses expectations
• Positive Sentiment: The company raised its Q3 revenue guidance to $44.6 billion-$45.8 billion, above consensus, signaling continued momentum.
• Positive Sentiment: TSMC expanded its Arizona plan by another $100 billion, lifting total U.S. investment to $265 billion and strengthening its role in advanced 2nm and AI chip production. Seeking Alpha: Wall Street Breakfast Podcast: TSMC Chips In $100B More
• Neutral Sentiment: Analysts and investors are weighing whether the company’s already-strong results and AI outlook were fully priced in, with some commentary pointing to “exceptionally high” expectations and profit-taking. MarketWatch: TSMC posts record quarter — but expectations are now exceptionally high
• Negative Sentiment: Chip stocks across Asia fell on caution that the AI trade may have become crowded, creating a broader sector sell-off that is weighing on TSM as well. Reuters: TSMC Q2 profit jumps 77% to record, far surpasses expectations

Analysts Set New Price Targets

TSM has been the topic of several recent analyst reports. Susquehanna lifted their price target on Taiwan Semiconductor Manufacturing from $500.00 to $575.00 and gave the company a “positive” rating in a research note on Monday, June 22nd. Citigroup reissued a “buy” rating on shares of Taiwan Semiconductor Manufacturing in a research note on Monday, July 6th. DA Davidson restated a “buy” rating and issued a $450.00 price target on shares of Taiwan Semiconductor Manufacturing in a research note on Friday, April 17th. Wall Street Zen raised shares of Taiwan Semiconductor Manufacturing from a “hold” rating to a “buy” rating in a research note on Sunday, March 22nd. Finally, Weiss Ratings downgraded shares of Taiwan Semiconductor Manufacturing from a “buy (b-)” rating to a “hold (c+)” rating in a report on Monday. Two research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and three have assigned a Hold rating to the company. Based on data from MarketBeat, the company currently has an average rating of “Moderate Buy” and an average price target of $449.38.

Insider Buying and Selling

In related news, VP Bor-Zen Tien purchased 1,000 shares of the firm’s stock in a transaction dated Monday, June 29th. The stock was bought at an average price of $76.64 per share, with a total value of $76,640.00. Following the completion of the purchase, the vice president owned 12,051 shares in the company, valued at approximately $923,588.64. This represents a 9.05% increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available at this link. Also, VP Lipen Yuan acquired 1,000 shares of the stock in a transaction dated Monday, June 22nd. The shares were bought at an average price of $79.19 per share, with a total value of $79,190.00. Following the completion of the transaction, the vice president directly owned 5,000 shares of the company’s stock, valued at $395,950. The trade was a 25.00% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. Insiders have acquired a total of 6,857 shares of company stock valued at $512,334 over the last 90 days. 1.11% of the stock is owned by insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the company. Quattro Advisors LLC acquired a new position in Taiwan Semiconductor Manufacturing in the fourth quarter valued at $25,000. Resources Management Corp CT ADV bought a new position in shares of Taiwan Semiconductor Manufacturing in the 2nd quarter worth about $32,000. Riggs Asset Managment Co. Inc. bought a new position in shares of Taiwan Semiconductor Manufacturing in the 2nd quarter worth about $41,000. FWL Investment Management LLC lifted its stake in shares of Taiwan Semiconductor Manufacturing by 26.5% in the 2nd quarter. FWL Investment Management LLC now owns 253 shares of the semiconductor company’s stock valued at $57,000 after purchasing an additional 53 shares during the period. Finally, SWAN Capital LLC lifted its stake in shares of Taiwan Semiconductor Manufacturing by 65.7% in the 4th quarter. SWAN Capital LLC now owns 227 shares of the semiconductor company’s stock valued at $69,000 after purchasing an additional 90 shares during the period. Institutional investors and hedge funds own 16.51% of the company’s stock.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company (TSMC) is a leading pure-play semiconductor foundry that provides wafer fabrication and related services to the global semiconductor industry. Founded in 1987 by Morris Chang and headquartered in Hsinchu, Taiwan, TSMC manufactures integrated circuits on behalf of fabless and integrated device manufacturers, offering contract chip production across a broad set of technologies and products.

TSMC’s service offering covers logic and mixed-signal process technologies, specialty processes for radio-frequency, power management and embedded memory, and advanced nodes used in mobile, high-performance computing and AI applications.