Taiwan Semiconductor Manufacturing (NYSE:TSM) Releases Quarterly Earnings Results, Beats Expectations By $0.49 EPS

Taiwan Semiconductor Manufacturing (NYSE:TSM) posted its quarterly earnings data on Thursday. The semiconductor company reported $4.31 earnings per share (EPS) for the quarter, topping the consensus estimate of $3.82 by $0.49, Zacks reports. Taiwan Semiconductor Manufacturing had a return on equity of 40.88% and a net margin of 50.31%.The firm had revenue of $39.89 billion for the quarter, compared to the consensus estimate of $39.83 billion. During the same quarter in the previous year, the company earned $2.47 EPS. The business’s revenue for the quarter was up 33.7% compared to the same quarter last year.

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 Stock Performance

TSM stock opened at $397.59 on Friday. The company has a 50 day moving average price of $426.79 and a 200 day moving average price of $377.94. Taiwan Semiconductor Manufacturing has a fifty-two week low of $223.70 and a fifty-two week high of $479.00. The company has a debt-to-equity ratio of 0.16, a current ratio of 2.49 and a quick ratio of 2.31. The stock has a market capitalization of $2.06 trillion, a PE ratio of 28.69, a price-to-earnings-growth ratio of 1.02 and a beta of 1.36.

Taiwan Semiconductor Manufacturing Increases Dividend

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

Insiders Place Their Bets

In other Taiwan Semiconductor Manufacturing news, VP Lipen Yuan purchased 1,000 shares of the stock in a transaction on Monday, June 22nd. The stock was bought at an average cost of $79.19 per share, for a total transaction of $79,190.00. Following the completion of the acquisition, 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 transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, VP Bor-Zen Tien acquired 1,000 shares of the stock in a transaction dated Monday, June 29th. The shares were bought at an average cost of $76.64 per share, with a total value of $76,640.00. Following the transaction, the vice president directly owned 12,051 shares of the company’s stock, valued at $923,588.64. This represents a 9.05% increase in their ownership of the stock. The disclosure for this purchase is available in the SEC filing. In the last three months, insiders bought 6,857 shares of company stock valued at $512,334. 1.11% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Hedge funds have recently added to or reduced their stakes in the business. Quattro Advisors LLC acquired a new position in shares of Taiwan Semiconductor Manufacturing during the 4th quarter worth approximately $25,000. Resources Management Corp CT ADV bought a new position in Taiwan Semiconductor Manufacturing during the second quarter worth $32,000. Riggs Asset Managment Co. Inc. acquired a new position in shares of Taiwan Semiconductor Manufacturing in the second quarter valued at $41,000. SWAN Capital LLC raised its holdings in 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 acquiring an additional 90 shares during the period. Finally, Triumph Capital Management acquired a new stake in Taiwan Semiconductor Manufacturing during the 3rd quarter worth approximately $70,000. Institutional investors own 16.51% of the company’s stock.

Key Taiwan Semiconductor Manufacturing News

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

• Positive Sentiment: TSMC delivered record Q2 profit and beat expectations, supported by strong demand for advanced AI chips and leading-edge nodes. Reuters article
• Positive Sentiment: The company raised its 2026 revenue growth outlook to above 40% and signaled continued AI-driven expansion, reinforcing the long-term growth story. MarketBeat article
• Neutral Sentiment: TSMC also announced an extra $100 billion investment in Arizona, expanding its U.S. manufacturing footprint but raising questions about capital intensity and margin pressure. Yahoo Finance article
• Negative Sentiment: The stock is being caught in a broader chip rout, with investors rotating out of semiconductor names amid worries that AI spending enthusiasm is cooling. Yahoo Finance article
• Negative Sentiment: Analysts and traders are flagging capex concerns, saying the surge in spending could compress free cash flow and keep the stock volatile in the near term. Benzinga article

Analysts Set New Price Targets

TSM has been the topic of a number of research reports. Needham & Company LLC boosted their price objective on Taiwan Semiconductor Manufacturing from $410.00 to $480.00 and gave the company a “buy” rating in a research report on Thursday, April 16th. Susquehanna raised their target price on Taiwan Semiconductor Manufacturing from $575.00 to $600.00 and gave the stock a “positive” rating in a research report on Thursday. Zacks Research upgraded shares of Taiwan Semiconductor Manufacturing from a “hold” rating to a “strong-buy” rating in a research note on Thursday. TD Cowen boosted their price target on shares of Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the company a “hold” rating in a report on Friday. Finally, Citigroup restated a “buy” rating on shares of Taiwan Semiconductor Manufacturing in a research note on Monday, July 6th. Three equities research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and two have assigned a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has a consensus rating of “Buy” and an average price target of $490.00.

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.