We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Rising AI Infrastructure Spending Likely to Boost TSM's Q1 Revenues
Read MoreHide Full Article
Key Takeaways
TSM expects Q1 revenues of $34.6B-$35.8B, up 38% year over year at the midpoint.
AI-driven demand for 3-nm and 5-nm chips continues to fuel strong top-line performance.
Higher costs from global expansion may have negatively impacted margins.
Taiwan Semiconductor Manufacturing Company Ltd. (TSM - Free Report) , also known as TSMC, is scheduled to release its first-quarter 2026 earnings on April 16. The world’s largest contract chipmaker looks well-positioned for another strong quarter, supported by the surging demand for its advanced chips amid soaring capital spending on artificial intelligence (AI) infrastructure buildouts.
Click here to know how TSM’s overall first-quarter results are likely to be.
AI Chip Demand Likely to Drive TSM’s Revenue Growth
Taiwan Semiconductor projects fourth-quarter revenues to come between $34.6 billion and $35.8 billion, implying a year-over-year increase of approximately 37.9% at the midpoint. The Zacks Consensus Estimate for the top line is pegged at $35.5 billion, calling for year-over-year growth of 39.1%.
The growing adoption of AI in cloud services, consumer devices and data centers continues to fuel the need for powerful, energy-efficient chips. In 2026 alone, top tech companies, including Amazon, Alphabet, Meta, Microsoft and Oracle, are projected to spend $660-$690 billion on AI infrastructure buildouts, according to a report by independent research firm The Futurum Group.
TSMC remains a key beneficiary of this trend. Its dominance in 3-nanometer (3nm) and 5-nm manufacturing nodes has been central to this surge, as major chip designers like NVIDIA, Apple and Advanced Micro Devices rely heavily on its cutting-edge processes.
Taiwan Semiconductor has been witnessing strong demand for its AI-focused products, including Chip-on-Wafer-on-Substrate advanced packaging solutions. This segment has seen consistent demand exceeding supply, reflecting the company’s critical role in powering AI and high-performance computing applications.
Taiwan Semiconductor Manufacturing Company Ltd. Price and EPS Surprise
Despite its strengths, Taiwan Semiconductor witnesses near-term hurdles. Geopolitical tensions, particularly between the United States and China, are expected to have impacted the company’s overall revenue growth in the to-be-reported quarter.
Overseas Expansion May Hurt TSMC’s Margins
While revenue momentum looks solid, rising operational costs are likely to have hurt Taiwan Semiconductor’s gross margin in the to-be-reported quarter. Taiwan Semiconductor’s aggressive global expansion — with new fabs in Arizona, Japan and Germany — has added cost burdens from higher labor and utility expenses. These sites, though strategically important for geographic diversification and customer proximity, are expected to reduce gross margins by 2-4% annually over the next few years as production ramps up.
Despite the prevailing challenges, analysts remain optimistic about TSMC’s bottom-line growth in the to-be-reported quarter. The Zacks Consensus Estimate for Taiwan Semiconductor’s first-quarter earnings has been revised upward by 2 cents to $3.29 per share, indicating year-over-year growth of 55.2%.
TSM’s Zacks Rank & Stocks to Consider
Currently, Taiwan Semiconductor carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has been revised upward by 70.4% to $58.36 per share in the past 30 days, suggesting an increase of 604% from fiscal 2025’s reported figure. Micron Technology shares have surged 500.5% over the past year.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved downward by a penny to $8.03 per share in the past 30 days, implying a year-over-year improvement of approximately 68.3%. NVIDIA shares have risen 68.5% in the trailing 12 months.
The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings has moved northward by 8 cents to $11.41 per share over the past seven days and suggests a year-over-year increase of 67.3%. Broadcom shares have soared 112.2% over the past year.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Rising AI Infrastructure Spending Likely to Boost TSM's Q1 Revenues
Key Takeaways
Taiwan Semiconductor Manufacturing Company Ltd. (TSM - Free Report) , also known as TSMC, is scheduled to release its first-quarter 2026 earnings on April 16. The world’s largest contract chipmaker looks well-positioned for another strong quarter, supported by the surging demand for its advanced chips amid soaring capital spending on artificial intelligence (AI) infrastructure buildouts.
Click here to know how TSM’s overall first-quarter results are likely to be.
AI Chip Demand Likely to Drive TSM’s Revenue Growth
Taiwan Semiconductor projects fourth-quarter revenues to come between $34.6 billion and $35.8 billion, implying a year-over-year increase of approximately 37.9% at the midpoint. The Zacks Consensus Estimate for the top line is pegged at $35.5 billion, calling for year-over-year growth of 39.1%.
The growing adoption of AI in cloud services, consumer devices and data centers continues to fuel the need for powerful, energy-efficient chips. In 2026 alone, top tech companies, including Amazon, Alphabet, Meta, Microsoft and Oracle, are projected to spend $660-$690 billion on AI infrastructure buildouts, according to a report by independent research firm The Futurum Group.
TSMC remains a key beneficiary of this trend. Its dominance in 3-nanometer (3nm) and 5-nm manufacturing nodes has been central to this surge, as major chip designers like NVIDIA, Apple and Advanced Micro Devices rely heavily on its cutting-edge processes.
Taiwan Semiconductor has been witnessing strong demand for its AI-focused products, including Chip-on-Wafer-on-Substrate advanced packaging solutions. This segment has seen consistent demand exceeding supply, reflecting the company’s critical role in powering AI and high-performance computing applications.
Taiwan Semiconductor Manufacturing Company Ltd. Price and EPS Surprise
Taiwan Semiconductor Manufacturing Company Ltd. price-eps-surprise | Taiwan Semiconductor Manufacturing Company Ltd. Quote
Despite its strengths, Taiwan Semiconductor witnesses near-term hurdles. Geopolitical tensions, particularly between the United States and China, are expected to have impacted the company’s overall revenue growth in the to-be-reported quarter.
Overseas Expansion May Hurt TSMC’s Margins
While revenue momentum looks solid, rising operational costs are likely to have hurt Taiwan Semiconductor’s gross margin in the to-be-reported quarter. Taiwan Semiconductor’s aggressive global expansion — with new fabs in Arizona, Japan and Germany — has added cost burdens from higher labor and utility expenses. These sites, though strategically important for geographic diversification and customer proximity, are expected to reduce gross margins by 2-4% annually over the next few years as production ramps up.
Despite the prevailing challenges, analysts remain optimistic about TSMC’s bottom-line growth in the to-be-reported quarter. The Zacks Consensus Estimate for Taiwan Semiconductor’s first-quarter earnings has been revised upward by 2 cents to $3.29 per share, indicating year-over-year growth of 55.2%.
TSM’s Zacks Rank & Stocks to Consider
Currently, Taiwan Semiconductor carries a Zacks Rank #3 (Hold).
Some better-ranked stocks worth considering in the broader Zacks Computer and Technology sector are Micron Technology (MU - Free Report) , NVIDIA (NVDA - Free Report) and Broadcom (AVGO - Free Report) , each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Micron Technology’s fiscal 2026 earnings has been revised upward by 70.4% to $58.36 per share in the past 30 days, suggesting an increase of 604% from fiscal 2025’s reported figure. Micron Technology shares have surged 500.5% over the past year.
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 earnings has moved downward by a penny to $8.03 per share in the past 30 days, implying a year-over-year improvement of approximately 68.3%. NVIDIA shares have risen 68.5% in the trailing 12 months.
The Zacks Consensus Estimate for Broadcom’s fiscal 2026 earnings has moved northward by 8 cents to $11.41 per share over the past seven days and suggests a year-over-year increase of 67.3%. Broadcom shares have soared 112.2% over the past year.