Can TSMC Beat Expectations and Set New Highs Again?
Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, has been one of the standout performers in the semiconductor sector — driven by AI demand, advanced process leadership, and strong earnings momentum. But as we head deeper into 2026, the big question for investors is: Can TSMC continue to beat expectations and push its stock to new highs?
1. A Strong Momentum Backed by Recent Beats
TSMC’s latest quarterly performance shows solid fundamentals. Its Q4 2025 revenue rose about 20% year-over-year, beating forecasts and easing concerns about cyclical slowdowns in consumer electronics demand. This growth was largely powered by robust shipments of AI-related chips for major customers like Nvidia and Apple. 
Wall Street is watching the upcoming full earnings release closely, with optimism that TSMC will sustain its trajectory. Some analysts are already pointing to continued double-digit profit growth, aided by full utilization of 3nm capacity and strong pricing power in advanced nodes. 
2. Bullish Analyst Targets Suggest Further Upside
A number of major brokerages have raised TSMC’s price targets recently, reflecting confidence in future earnings:
• Analysts at HSBC increased their target citing stronger pricing power and a projected 36% compound earnings growth through 2027. 
• JPMorgan also lifted its target, maintaining an Overweight (Buy) rating on the shares, recognizing the AI foundry demand tailwinds. 
• Independent forecasts have median 12-month targets implying meaningful upside from current levels — with some scenarios suggesting that TSMC could exceed these consensus forecasts if AI earnings accelerate more than expected. 
In addition, broader stock lists for 2026 include TSMC as a top tech pick, highlighting its strategic industry positioning. 
3. Strategic Growth Drivers Still Intact
Three major structural themes support TSMC’s outlook:
AI and High-Performance Compute:
AI accelerators, data-center chips, and HPC applications continue to grow rapidly as hyperscalers increase capital spending. TSMC’s manufacturing is central to this ecosystem.
Advanced Node Leadership:
TSMC is moving into 2nm and beyond, a significant competitive edge in performance and power efficiency for next-gen chips — a technology premium that can sustain higher margins. 
Global Expansion:
The company’s multi-year investments in fabs in places like Arizona and Japan are designed to capture supply chain shifts and cater to geopolitical diversification of chip production. 
4. Risks That Could Temper the Upside
Despite the positives, some risks could challenge the path to new highs:
Valuation and Short-Term Targets:
Certain market data shows that the average price target for TSMC doesn’t imply significant upside from current levels, suggesting that expectations may already be priced in — at least in the short term. 
Competitive Pressures:
Rival foundries — notably Intel’s advanced process push — are gaining traction, which could chip away at TSMC’s node leadership if execution surprises positively. 
Geopolitical Uncertainty:
TSMC’s exposure to cross-strait tensions and global trade policies is a perennial risk. Elevated tariffs or supply chain disruptions could impact earnings and valuation.
5. So, Can TSMC Set New Highs Again?
The weight of evidence suggests yes — but with caveats:
• The company’s earnings and revenue beats, powered by AI chip demand, provide a fundamental basis for continued growth. 
• Analysts’ raised price targets and Buy ratings indicate that institutional confidence remains high. 
• Structural drivers such as advanced nodes and global expansion give TSMC strategic staying power. 
However, setting new all-time highs will depend on several factors aligning: sustained AI capital spending, smooth execution of expansion plans, and macro stability. Over the long term — if TSMC continues to demonstrate growth above market expectations — it certainly has the potential to reach fresh valuation highs again.
⸻
Bottom Line
TSMC’s combination of secular demand drivers, production leadership, and strong earnings momentum means it remains a top candidate to outperform again. But like any major tech stock, it’s not immune to valuation pressures and competitive/geopolitical risks. Investors should weigh these factors alongside personal risk tolerance and broader portfolio strategy before positioning for another rally.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
