Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) continues to benefit from surging demand for advanced chips, as investors and analysts look ahead to another strong earnings report.
Record Quarter In Sight
Taiwan Semiconductor is poised to deliver a record fourth quarter as demand for artificial intelligence infrastructure continues to fuel growth.
Analysts expect the contract chipmaker to report a 27% jump in fourth-quarter net profit to 475.2 billion New Taiwanese dollars ($15.02 billion) for the three months ended December 31, Reuters reported on Monday, citing an LSEG SmartEstimate compiled from 19 analysts.
The chipmaker will provide guidance for the first quarter and full year on Thursday.
Advanced Nodes Power Revenue Growth
Taiwan Semiconductor has already reported a 20.5% jump in fourth-quarter revenue to 1.05 trillion New Taiwan dollars ($33.1 billion), beating market expectations.
Any profit above 452.3 billion New Taiwan dollars would mark the company's highest-ever quarterly net income and extend its streak to an eighth consecutive quarter of profit growth.
Strong utilization of 3-nanometer capacity underpinned the revenue surge, supported by Apple Inc.'s (NASDAQ:AAPL) iPhone 17 lineup using the A19 chip, Galen Zeng, senior research manager at IDC, told Reuters.
Zeng added that IDC now expects Taiwan Semiconductor's revenue to grow 25%–30% in 2026, up from a prior 22%–26% forecast, driven by booming demand for AI server accelerators and rising contributions from 2-nanometer technology.
He said the AI server accelerator market could grow 78% year over year in 2026.
Analysts Raise Forecasts Ahead Of Earnings
Wall Street analysts expect Taiwan Semiconductor to extend its momentum as it prepares to report full fourth-quarter earnings.
Analysts have raised their price forecasts, pointing to Taiwan Semiconductor's central role in the AI hardware race and its tightening grip on advanced chip capacity.
Goldman Sachs lifted its forecast by 35% to 2,330 New Taiwan dollars, citing projected 30% revenue growth in 2026, while JPMorgan expects operating margins to climb to a three-year high above 50%, Bloomberg reported.
TSM Price Action: Taiwan Semiconductor shares were down 0.56% at $321.83 during premarket trading on Monday. The stock is approaching its 52-week high of $333.08, according to Benzinga Pro data.
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