Taiwan Semiconductor Manufacturing (NYSE:TSM) Issues Earnings Results, Beats Estimates By $0.23 EPS

Key Points

• TSMC beat Q1 expectations with EPS $3.49 vs. $3.26, reporting record revenue of $35.9 billion and a 66.2% gross margin that drove very strong operating margins and ROE.
• Management raised guidance—Q2 revenue of $39.0–$40.2 billion (~10% sequential) and now expects full‑year 2026 revenue growth of above 30% in USD—while accelerating capacity buildout and guiding 2026 capex toward the high end of $52–$56 billion.
• Warnings include margin dilution from early N2 and overseas fab ramps (roughly ~2–4% hit) and potential energy/material cost pressure from geopolitical tensions, and heavy capex could pressure free cash flow near term.

Taiwan Semiconductor Manufacturing (NYSE:TSM - Get Free Report) issued its quarterly earnings data on Thursday. The semiconductor company reported $3.49 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $3.26 by $0.23, Zacks reports. Taiwan Semiconductor Manufacturing had a return on equity of 34.89% and a net margin of 45.13%.

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

• TSMC reported a strong Q1 with revenue of $35.9 billion (up 6.4% sequential in USD), gross margin 66.2% (+390 bps QoQ), operating margin 58.1%, EPS TWD 22.08 and ROE 40.5%.
• Q2 guidance is upbeat — revenue guidance of $39.0–$40.2 billion (≈10% sequential) and management now expects full‑year 2026 revenue growth of above 30% in USD, with gross margin guided to 65.5%–67.5%.
• TSMC is accelerating investment to meet AI/HPC demand, guiding 2026 CapEx toward the high end of $52–$56 billion and executing global N3 expansions (new fabs in Tainan, Arizona, Japan) while ramping N2 and A14 technologies.
• Management flagged margin headwinds — initial N2 ramp expected to dilute 2026 gross margin by ~2–3%, overseas fab ramps may dilute margins (2–3% early, widening to 3–4% later), and possible material/gas price increases from Middle East tensions could further pressure profitability.
• Demand/supply outlook — AI/HPC demand remains “extremely robust” and capacity is expected to stay tight into 2027; TSMC emphasizes supply‑chain resiliency (multi‑sourcing, safety stock) and government coordination on energy to avoid near‑term disruptions.

Taiwan Semiconductor Manufacturing Stock Down 1.0%

Shares of TSM stock opened at $375.97 on Thursday. Taiwan Semiconductor Manufacturing has a 1 year low of $145.84 and a 1 year high of $390.20. The stock has a market cap of $1.95 trillion, a PE ratio of 35.30, a price-to-earnings-growth ratio of 1.16 and a beta of 1.35. The business's fifty day moving average is $353.69 and its 200-day moving average is $320.70. The company has a debt-to-equity ratio of 0.17, a quick ratio of 2.42 and a current ratio of 2.62.

Taiwan Semiconductor Manufacturing Cuts Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, July 9th. Stockholders of record on Thursday, June 11th will be given a dividend of $0.9503 per share. The ex-dividend date is Thursday, June 11th. This represents a $3.80 annualized dividend and a dividend yield of 1.0%. Taiwan Semiconductor Manufacturing's dividend payout ratio (DPR) is 27.89%.

Insiders Place Their Bets

In other Taiwan Semiconductor Manufacturing news, VP Bor-Zen Tien bought 1,000 shares of Taiwan Semiconductor Manufacturing stock in a transaction that occurred on Sunday, March 22nd. The stock was purchased at an average cost of $55.93 per share, for a total transaction of $55,930.00. Following the completion of the acquisition, the vice president owned 9,051 shares of the company's stock, valued at approximately $506,222.43. This represents a 12.42% increase in their position. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Insiders own 1.11% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of TSM. Brighton Jones LLC boosted its stake in shares of Taiwan Semiconductor Manufacturing by 20.9% during the 4th quarter. Brighton Jones LLC now owns 10,930 shares of the semiconductor company's stock worth $2,159,000 after acquiring an additional 1,892 shares in the last quarter. Prairie Wealth Advisors Inc. bought a new stake in shares of Taiwan Semiconductor Manufacturing during the 3rd quarter worth $203,000. Alchemi Wealth LLC bought a new stake in shares of Taiwan Semiconductor Manufacturing during the 4th quarter worth $203,000. Vestor Capital LLC boosted its stake in shares of Taiwan Semiconductor Manufacturing by 54.5% during the 4th quarter. Vestor Capital LLC now owns 547 shares of the semiconductor company's stock worth $166,000 after acquiring an additional 193 shares in the last quarter. Finally, WFA of San Diego LLC bought a new stake in shares of Taiwan Semiconductor Manufacturing during the 2nd quarter worth $164,000. Institutional investors own 16.51% of the company's stock.

More Taiwan Semiconductor Manufacturing News

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

• Positive Sentiment: Record Q1 results — TSMC reported a ~58% jump in quarterly net profit and beat expectations, driven by strong AI-related demand; this underpins investor confidence in near-term revenue and margins. Article Title
• Positive Sentiment: Upgraded outlook / continued AI strength — Management boosted guidance and signalled sustained AI chip demand, and said capex plans will expand capacity to meet that demand. Article Title
• Positive Sentiment: Market tech optimism — TSMC’s upbeat forecast helped lift Nasdaq futures and supported a broader rally in semiconductor and tech shares. Article Title
• Positive Sentiment: Analyst and institutional support — Wall Street sentiment remains bullish with recent buy/overweight calls and elevated price targets; insiders and some funds have been buyers. Article Title
• Neutral Sentiment: Guidance roughly in line — Q2 revenue guidance was given in a range ($39.0B–$40.2B) roughly surrounding consensus, leaving some ambiguity for short-term estimates.
• Neutral Sentiment: Capacity constraints — Commentary that advanced-node capacity is largely spoken for through 2028 supports long-term pricing power but creates short-term execution/lead-time dynamics. Article Title
• Neutral Sentiment: Stock price behavior — Some analysts note the paradox of record earnings yet limited upside immediately after results, suggesting the rally priced in much of the good news. Article Title
• Negative Sentiment: Geopolitical cost risks — Management and reports warned Middle East tensions are raising energy and logistics costs, a potential near-term headwind to margins. Article Title
• Negative Sentiment: Heavy capital spending — A sizable capex uptick to expand advanced-node capacity supports long-term growth but could pressure free cash flow and be viewed as a near-term drag by some investors. Article Title

Wall Street Analysts Forecast Growth

A number of equities analysts recently issued reports on TSM shares. DA Davidson raised Taiwan Semiconductor Manufacturing to a "strong-buy" rating in a report on Friday, February 13th. Argus raised Taiwan Semiconductor Manufacturing to a "strong-buy" rating in a report on Thursday, January 15th. Weiss Ratings raised Taiwan Semiconductor Manufacturing from a "hold (c+)" rating to a "buy (b-)" rating in a report on Friday, March 20th. Citigroup reaffirmed a "buy" rating on shares of Taiwan Semiconductor Manufacturing in a research note on Friday, January 9th. Finally, Needham & Company LLC lifted their price target on Taiwan Semiconductor Manufacturing from $410.00 to $480.00 and gave the company a "buy" rating in a research report on Thursday. Three investment analysts have rated the stock with a Strong Buy rating, ten have given a Buy rating and two have issued a Hold rating to the stock. Based on data from MarketBeat, the stock currently has a consensus rating of "Buy" and an average target price of $401.43.

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.

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