TSMC sales soar by a third: AI frenzy outweighs investor fears of war

Taiwan's TSMC, the world's largest custom chip maker, reported a sharp rise in quarterly revenue that beat market expectations. The ongoing boom in artificial intelligence was stronger than fears that a prolonged war in the Middle East and rising energy prices could hit Asian companies and the technology sector as a whole.

TSMC's January-March 2026 revenue reached NT$1.13 trillion ($35.6 billion), up 35% year-on-year. March sales soared 45%. These results exceeded the consensus forecast of NT$1.12 trillion and matched the company's own January guidance, Reuters reports.

On April 9, TSMC shares ended the session on the Taiwan Stock Exchange in the plus by 2.3%. After the publication of the earnings data, the company's American Depositary Receipts (ADR) quotes add almost 2% on the US premarket.

TSMC will report its full first-quarter financial results on April 16. Thanks to strong demand for chips to work with artificial intelligence, other key indicators of the company should also beat the market consensus, said Bloomberg analyst Charles Shum. The expert noted the "favorable" for the Taiwanese exporter strengthening of the U.S. dollar and predicted a record gross margin - at least 65%.

According to him, investors at the confab with TSMC management will be interested in the company's assessment of demand for PCs and smartphones, in particular, the risk of a new inventory adjustment due to rising memory costs. The market will also assess the threat of lower profitability in the second half of the year due to possible disruptions in material and energy supplies. The key question remains whether sustained demand for AI chips will "support an increase in the long-term gross margin target above 58%," Bloomberg's Shum pointed out.

According to FactSet, Wall Street is almost completely confident in TSMC's prospects: the advice to "buy" the company's securities (Buy and Overweight ratings) is now given by 50 out of 51 experts leading its analytical coverage. The average ADR target price of $429 per unit, calculated by the service, implies a 17.5% growth in quotations over the year.

TSMC has become one of the main beneficiaries of the race to build computing infrastructure for AI. Investors are looking for confirmation of the sustainability of this trend after the bigtechs pledged $650 billion in AI capital expenditures for this year, Bloomberg points out. The Taiwanese company's shares have risen more than 20% in U.S. trading since January, outperforming the securities of TSMC's major customers Apple and Nvidia (shares of both are in the red since the beginning of the year).

This article was AI-translated and verified by a human editor