Taiwan Semiconductor Manufacturing Company (TSMC) is expected to report its fourth consecutive quarter of record net profit on Thursday, April 16, 2026. Analysts forecast a net profit of approximately T$542.6 billion (US$17.1 billion) for the first quarter of 2026, representing a staggering year-on-year surge of roughly 50%. This would also mark the company's ninth straight quarter of profit growth.
The chipmaking giant has already signaled strong momentum, having reported Q1 2026 revenue that jumped 35% year-on-year, ahead of market expectations. The primary driver is insatiable demand for AI infrastructure, specifically for TSMC's advanced 3-nanometer chips and its sophisticated packaging technology. Demand is reportedly "outpacing what the company can currently produce," with lead times for cutting-edge AI chips stretching beyond 50 weeks, up from about 30 weeks just six months ago.
Bank of America Securities raised its price target on TSMC's stock (NYSE: TSM) from $470 to $500 on April 12, maintaining a Buy rating. The firm forecasts 7%–9% quarter-on-quarter sales growth for Q2, driven by high-performance computing orders, and expects gross margins to expand from 63%–65% in Q1 to around 66% in Q2. Arthur Lai, head of Asia tech research at Macquarie Capital, anticipates TSMC will guide for higher sequential revenue growth in Q2, citing sustained AI demand and the company's manufacturing lead.
Investors are keenly awaiting whether TSMC will hold or raise its ambitious 2026 capital expenditure plans, seen as a barometer of management's confidence in long-term AI demand. The company has committed between $52 billion and $56 billion in spending for 2026 and is investing $165 billion to build chip factories in Arizona. It has also upgraded its Japan plans to include full 3-nanometer production.
Despite the bullish outlook, some valuation metrics suggest caution. GuruFocus calculates TSMC's intrinsic value at $280.17, implying the current stock price of $370.60 is about 32% overvalued. The stock's P/E ratio of 30.19x is well above its five-year median of 22.55x. However, the firm gives TSMC a near-perfect GF Score of 98/100, with top marks for profitability and growth.
Geopolitical and supply chain pressures remain a backdrop, with the war in the Middle East raising concerns about potential disruptions to critical semiconductor materials like helium and neon. However, analysts believe TSMC's diversified sourcing and safety stock should mitigate short-term risks.
