Nvidia's key partner increased revenue by 20%. Wall Street has high hopes for him
Sales of the largest chip maker, TSMC, beat forecasts
Taiwan Semiconductor Manufacturing Co. (TSMC), the largest contract chip maker and a major supplier to Nvidia, reported better-than-forecast sales growth in the quarter before New Year's Eve. Demand for the Taiwanese company's products surged amid a frenzy of interest in artificial intelligence technologies.
Details
TSMC's October-December 2025 revenue rose just over 20 percent to NT$1.046 trillion ($33.04 billion) from NT$868.46 billion in the same period last year, Reuters calculated based on data released by the company on Jan. 9.
TSMC's actual sales exceeded the LSEG SmartEstimate consensus forecast, based on a survey of 20 analysts, which assumed quarterly revenue of NT$1.036 trillion ($32.72 billion), and also fell within TSMC's own forecast range ($32.2-33.4 billion), announced in October 2025.
TSMC's American Depositary Receipts (ADRs) are up 0.7% at the New York premarket on January 9. The company will release its full financial statements for the fourth quarter of 2025, updated outlook for the current quarter and the full year 2026 on January 15.
What Wall Street expects from TSMC
Since the beginning of 2026, at least six brokers, including JPMorgan Chase and Goldman Sachs, have raised their forecasts for TSMC shares amid their record rally, Bloomberg notes. At trading in Taipei on January 6, the company's papers reached a record high of 1705 Taiwanese dollars. Over the past year, they have risen in price by 52%.
JPMorgan experts raised their target for TSMC shares by 23% to NT$2,100 ($66.5) per paper, expecting higher sales and profitability. Goldman Sachs raised its target price for TSMC shares by 37% to NT$2,330, citing expectations for another year of solid growth driven by strong demand for AI technology.
Context
TSMC, whose customers include Nvidia and Apple, has been a major beneficiary of technological advances in AI. This has more than offset the post-pandemic waning demand for chips for tablets and similar consumer electronics, Reuters notes.
Similar dynamics is demonstrated by Taiwanese Foxconn, the leading assembler of iPhones and the main manufacturer of servers for Nvidia. On January 5, the company reported a 22.1% increase in revenue last quarter, beating the LSEG consensus forecast. The growth was driven by strong performance of Foxconn's cloud and networking products division, driven by a frenzy of demand for AI solutions, while revenue from the smart consumer electronics segment (which includes the iPhone) declined slightly due to unfavorable currency exchange rates.
This article was AI-translated and verified by a human editor
