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TSMC
(NYSE:TSM)
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Rating:77Outperform
Price Target:
$465.00
â–˛(25.51% Upside)
Action:Reiterated
Date:07/17/26
Overall score is driven primarily by very strong financial performance (high margins, improving growth, and conservative leverage) and an upbeat earnings outlook led by AI/HPC demand and raised full-year expectations. The main constraints are weak near-term technical momentum (below key moving averages with negative MACD) and a somewhat demanding valuation with a low dividend yield, alongside guided near-term margin dilution from the N2 and overseas ramp.
Positive Factors
Exceptional Profitability
Sustained very high gross and net margins reflect durable pricing power, exceptional scale and process efficiency in foundry operations. High margins support reinvestment and dividends, give resilience to cyclical downturns, and preserve cash flow capacity to fund advanced-node ramps over multi-year horizons.
Negative Factors
Margin Dilution from Advanced Ramps
Steep N2 ramp and overseas fab startup costs are projected to subtract several percentage points of gross margin. Those structural mix shifts toward early-stage nodes and foreign fabs can compress margins for multiple quarters and require sustained scale-up to recover prior profitability levels.
Read all positive and negative factors
Positive Factors
Negative Factors
Exceptional Profitability
Sustained very high gross and net margins reflect durable pricing power, exceptional scale and process efficiency in foundry operations. High margins support reinvestment and dividends, give resilience to cyclical downturns, and preserve cash flow capacity to fund advanced-node ramps over multi-year horizons.
Read all positive factors
TSMC Key Performance Indicators (KPIs)
Any
Revenue By Technology
Breaks down revenue by technology type, providing insight into which innovations are most profitable and where the company might invest in further development.
Breaks down revenue by technology type, providing insight into which innovations are most profitable and where the company might invest in further development.
Data provided by:
The Fly
The FlyTSMC (TSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.83T
Dividend Yield0.88%
Average Volume (3M)14.78M
Price to Earnings (P/E)31.1
Beta (1Y)1.56
Revenue Growth34.60%
EPS GrowthN/A
CountryUS
Employees65,152
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)435.25
Shares Outstanding5,186,474,000
10 Day Avg. Volume15,142,156
30 Day Avg. Volume14,776,895
Financial Highlights & Ratios
PEG Ratio0.65
Price to Book (P/B)9.22
Price to Sales (P/S)12.83
P/FCF Ratio44.99
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$516.67Price Target Upside39.45% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)16.44
Revenue Forecast (FY)$164.68B
TSMC Business Overview & Revenue Model
Company Description
Taiwan Semiconductor Manufacturing Company Limited (TSMC), along with its affiliated entities, operates globally in the semiconductor industry, specializing in the manufacturing, packaging, meticulous testing, and worldwide distribution of integra...
How the Company Makes Money
TSMC primarily makes money by manufacturing semiconductors for fabless chip designers and integrated device manufacturers that outsource part or all of their production. Its core revenue stream is foundry wafer sales: customers pay for silicon waf...
TSMC Earnings Call Summary
Earnings Call Date:Jul 16, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 15, 2026
Earnings Call Sentiment Positive
The call conveyed strong demand-driven momentum led by AI/HPC and leading-edge technologies: robust Q2 results, raised full-year growth and CapEx, major U.S. and global capacity commitments, and clear progress on next-generation process nodes (A14). However, management also highlighted near-term margin dilution from 2 nm and overseas ramps, tight packaging capacity, working capital increases, macro-sensitive end-market softness (smartphones), and some execution/timing uncertainties for large investments. On balance, the positive demand, technology leadership, liquidity and expanded investment plans outweigh the operational and margin headwinds.Positive Updates
Strong Q2 Revenue and Upbeat Q3 Guidance
Reported Q2 revenue of $40.2 billion (at the high end of guidance). Third-quarter 2026 revenue guidance of $44.6B–$45.8B, implying ~12% sequential growth and ~37% year-over-year growth at the midpoint.
Negative Updates
Gross Margin Dilution from 2 nm Ramp and Overseas Expansion
Management expects the steep ramp of 2 nm to dilute gross margin by ~3–4 percentage points in H2 2026; overseas fab ramps forecast to dilute gross margin by ~2%–3% in early stages and widen to ~3%–4% in latter stages.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Q2 Revenue and Upbeat Q3 Guidance
Reported Q2 revenue of $40.2 billion (at the high end of guidance). Third-quarter 2026 revenue guidance of $44.6B–$45.8B, implying ~12% sequential growth and ~37% year-over-year growth at the midpoint.
Read all positive updates
Company Guidance
TSMC guided third‑quarter 2026 revenue of $44.6–45.8 billion (midpoint +12% sequential, +37% YoY) using an exchange rate of $1 = TWD 32, with gross margin expected 65–67% (midpoint ~66%) and operating margin 56–58%; management noted Q2 revenue was $40.2 billion with Q2 gross margin 67.7% (↑150 bps QoQ), wafer revenue mix N2 3%, N3 30%, N5 33%, N7 11% (7nm and below = 77% of wafer revenue), and platform mix HPC 66% (↑20% QoQ), smartphone 22% (‑4%), IoT 5% (↑4%), automotive 4% (↑15%), DCE 1% (↑5%). Balance sheet and cash/flow metrics cited: cash & marketable securities TWD 3.5 trillion (~$110B), cash balance up TWD 99B to TWD 3.1T, cash from operations TWD 783B in Q2, Q2 CapEx TWD 496B (~$15.7B) and dividend distributions TWD 156B; full‑year 2026 CapEx was raised to $60–64B (70–80% for advanced processes, ~10% specialty, 10–20% packaging/testing/mask), full‑year revenue now expected slightly above +40% YoY in USD, and dividends set at TWD 24/share for 2026 (vs TWD 18/share in 2025, a +33% increase). Management warned the steep N2 ramp will dilute gross margin by ~3–4 ppt in H2 (overseas fab ramps may dilute gross margin 2–4% over time), announced an additional $100B Arizona investment (several — ~four — additional fabs) and three new N3 fabs (Taiwan, Arizona, Japan).TSMC Financial Statement Overview
Summary
Income Statement
92
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
84
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.45T | 3.85T | 2.89T | 2.16T | 2.26T | 1.59T |
| Gross Profit | 2.86T | 2.30T | 1.62T | 1.18T | 1.35T | 819.54B |
| EBITDA | 3.20T | 2.75T | 1.98T | 1.52T | 1.59T | 1.09T |
| Net Income | 2.24T | 1.74T | 1.16T | 851.74B | 992.92B | 592.36B |
Balance Sheet | ||||||
| Total Assets | 9.38T | 7.93T | 6.69T | 5.53T | 4.96T | 3.73T |
| Cash, Cash Equivalents and Short-Term Investments | 3.52T | 3.13T | 2.49T | 1.71T | 1.59T | 1.20T |
| Total Debt | 982.45B | 1.06T | 1.05T | 956.26B | 888.17B | 753.63B |
| Total Liabilities | 2.90T | 2.54T | 2.41T | 2.08T | 2.05T | 1.57T |
| Stockholders Equity | 6.43T | 5.36T | 4.24T | 3.43T | 2.90T | 2.15T |
Cash Flow | ||||||
| Free Cash Flow | 1.19T | 1.10T | 870.17B | 286.57B | 520.97B | 262.72B |
| Operating Cash Flow | 2.68T | 2.38T | 1.83T | 1.24T | 1.61T | 1.11T |
| Investing Cash Flow | -1.53T | -1.26T | -864.84B | -906.12B | -1.19T | -836.37B |
| Financing Cash Flow | -532.25B | -425.58B | -346.30B | -204.89B | -200.24B | 136.61B |
TSMC Technical Analysis
Neutral
370.50
Price Trends
425.29
Negative
392.88
Positive
350.65
Positive
Market Momentum
-4.11
Positive
39.16
Neutral
16.09
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSM, the sentiment is Neutral. The current price of 370.5 is below the 20-day moving average (MA) of 437.37, below the 50-day MA of 425.29, and above the 200-day MA of 350.65, indicating a neutral trend. The MACD of -4.11 indicates Positive momentum. The RSI at 39.16 is Neutral, neither overbought nor oversold. The STOCH value of 16.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSM.
TSMC Risk Analysis
TSMC disclosed 26 risk factors in its most recent earnings report. TSMC reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TSMC Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $420.53B | 49.55 | 39.78% | 0.69% | 3.35% | 29.52% | |
78 Outperform | $808.39B | 160.96 | 8.08% | ― | 34.97% | 123.87% | |
77 Outperform | $1.83T | 31.12 | 36.93% | 0.82% | 34.60% | ― | |
77 Outperform | $671.41B | 59.37 | 51.97% | 0.63% | 17.87% | 23.14% | |
69 Neutral | $31.54B | 40.77 | 6.66% | ― | 0.80% | ― | |
63 Neutral | $477.67B | -153.29 | -2.95% | ― | 1.36% | 86.07% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
TSM
TSMC
398.37
161.55
68.22%
AMD
Advanced Micro Devices
495.76
338.76
215.77%
AMAT
Applied Materials
529.66
338.45
177.01%
ASML
ASML Holding
1,747.58
1,032.67
144.45%
INTC
Intel
95.04
71.78
308.60%
GFS
GlobalFoundries Inc
57.48
16.96
41.85%
TSMC Corporate Events
TSMC Posts 77% Profit Surge on Strong 2nm and 3nm Demand in Q2 2026
Jul 17, 2026
TSMC reported strong financial results for the quarter ended June 30, 2026, with consolidated revenue of NT$1,270.38 billion and net income of NT$706.56 billion, translating to EPS of NT$27.25. In U.S. dollar terms, revenue reached $40.20 billion,...
TSMC Posts Strong June 2026 Revenue Surge and Bolsters Global Subsidiary Support
Jul 13, 2026
TSMC reported that its consolidated net revenue for June 2026 climbed to NT$442.68 billion, up 6.2% from May and 67.9% from June 2025, with revenue for January through June totaling NT$2,404.48 billion, a 35.6% increase year on year. The company a...
TSMC Arizona Announces Treasurer Change Effective July 1, 2026
Jul 2, 2026
Taiwan Semiconductor Manufacturing Company Limited reported a management change at its major U.S. subsidiary, TSMC Arizona Corporation, effective July 1, 2026. The adjustment reflects governance actions taken under the oversight of Senior Vice Pre...
TSMC Details Heavy Capex, Bond Issuance and Share Capital Reduction for May 2026
Jun 25, 2026
In a June 25, 2026 filing for the month of May, TSMC reported minor changes in executive shareholdings, including a 200,000-share reduction by Vice President Arthur Chuang and a 2,000-share increase by Vice President B.Z. Tien, with no new share p...
TSMC Posts 30% Year-on-Year Revenue Surge for May 2026, Details Expanded U.S. Guarantees
Jun 10, 2026
On June 10, 2026, TSMC reported consolidated net revenue of NT$416.98 billion for May 2026, up 1.5% from April and 30.1% year on year, with revenue for January through May reaching NT$1.96 trillion, a 30.0% increase over the same period in 2025. T...
TSMC Shareholders Approve 2025 Results and Charter Changes at June 4 Meeting
Jun 4, 2026
On June 4, 2026, TSMC held its 2026 Annual Shareholders’ Meeting in Hsinchu, Taiwan, where shareholders acknowledged the company’s 2025 business report and financial statements. For 2025, TSMC reported consolidated revenue of NT$3,809....
TSMC Makes Technical Upward Adjustment to Q4 2025 Cash Dividend Per Share
May 27, 2026
On February 10, 2026, TSMC’s board approved a cash dividend of NT$155.6 billion, originally set at NT$6.0 per common share, for the fourth quarter of 2025, with payment scheduled for July 9, 2026. Subsequent minor changes in the number of ou...
TSMC Reports April Portfolio Shift Toward Fixed-Income, Leaves Capital Structure Unchanged
May 26, 2026
On May 26, 2026, TSMC filed a Form 6-K reporting routine corporate developments for April 2026, with no changes in shareholdings or share pledges by its directors, executives, or major shareholders owning more than 10% of its common stock. The boa...
TSMC Trims Vanguard Stake to Refocus on Core Foundry Business
May 15, 2026
On May 15, 2026, TSMC announced plans to sell up to 152 million common shares of Vanguard International Semiconductor (VIS), representing about 8.1% of VIS’s fully diluted capital, via a block trade to institutional investors. The move follo...
TSMC Files Q1 2026 Reviewed Financials with U.S. SEC
May 15, 2026
TSMC has filed a Form 6-K with the U.S. Securities and Exchange Commission for May 2026, providing its consolidated financial statements for the three months ended March 31, 2026 and 2025. The filing, signed on May 15, 2026 by Senior Vice Presiden...
TSMC Approves Up to US$20 Billion Capital Injection for Arizona Unit
May 12, 2026
On May 12, 2026, TSMC disclosed that its U.S. subsidiary, TSMC Arizona Corporation, had its board of directors approve by written consent a capital increase plan. The resolution authorizes an injection of up to US$20 billion from the parent compan...
TSMC Board Greenlights Q1 Dividend and Massive US$31 Billion Capacity Expansion
May 12, 2026
On May 12, 2026, TSMC’s board of directors approved the company’s first-quarter 2026 business report and financial statements, reporting consolidated revenue of NT$1.134 trillion and net income of about NT$572.5 billion, equivalent to ...
TSMC and Sony Sign MOU for Next-Generation Image Sensor Joint Venture in Japan
May 8, 2026
On May 8, 2026, Sony Semiconductor Solutions and TSMC announced they had signed a non-binding memorandum of understanding to form a strategic partnership for next-generation image sensors. The plan calls for a joint venture, majority-controlled by...
TSMC Posts Double-Digit Revenue Growth in April as Group Bolsters Support for Overseas Units
May 8, 2026
TSMC reported that on May 8, 2026, its consolidated net revenue for April 2026 reached approximately NT$410.73 billion, down 1.1% from March but up 17.5% year on year, while revenue for January through April climbed 29.9% to NT$1.54 trillion compa...
TSMC Details March 2026 Insider Share Increases and Capital Actions in Form 6-K Filing
Apr 24, 2026
In April 2026, TSMC filed a Form 6-K with the U.S. Securities and Exchange Commission detailing internal shareholding changes for the month of March among its board members, executive officers, and major shareholders. The filing, signed on April 2...
TSMC Board Revises Agenda for 2026 Annual Shareholders’ Meeting
Apr 17, 2026
On April 17, 2026, TSMC’s board convened a special meeting and approved a revision to the agenda for the company’s 2026 annual shareholders’ meeting, reshaping the items to be reported and resolved. The move clarifies which 2025 ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.