TSMC shares surge 4.44% on record quarterly results and aggressive capex plans

TSMC’s U.S.-listed shares surged 4.44% in pre-market trading on Jan. 16, fueled by a record-breaking quarterly performance and aggressive capital expenditure plans. The chipmaker reported NT$505 billion ($16 billion) in net profit and over NT$1 trillion ($33.1 billion) in revenue, both surpassing Wall Street estimates, signaling sustained demand for AI-driven chips.

The results underscored TSMC’s pivotal role in the AI infrastructure boom, with the company forecasting a 25% increase in equipment and infrastructure spending in 2026. This outlook bolstered shares of downstream partners, including chip designers and equipment suppliers, as investors bet on the sector’s growth trajectory. Analysts noted the shift from speculative AI bets to companies demonstrating tangible revenue from AI-related demand.

Industry observers highlighted that TSMC’s robust earnings and spending plans reinforced confidence in the AI hardware ecosystem. The company’s focus on expanding U.S. manufacturing capacity and advancing 2nm process technology further solidified its position as the linchpin of the AI era. However, concerns linger about long-term monetization challenges, with some investors cautioning against overreliance on unproven AI-driven growth narratives.

Investors are also closely watching the long-term sustainability of TSMC’s AI-driven growth narrative. While the current trajectory appears strong, the company must continue to innovate and scale its U.S. operations to maintain its leadership in the global semiconductor market.

Looking ahead, TSMC’s ability to manage rising capital expenditures while maintaining high profit margins will be crucial to sustaining its current momentum and investor confidence in the AI revolution.