Why Taiwan Semiconductor Stock Surged Today

• Taiwan Semiconductor Manufacturing Company bushed connected income and bushed connected net past night.

• Earnings are increasing overmuch faster than analysts had anticipated.

• 10 stocks we similar amended than Taiwan Semiconductor Manufacturing ›

Taiwan Semiconductor Manufacturing Company (NYSE: TSM) banal soared 6.1% done 10:25 a.m. ET Thursday connected a beardown Q4 2025 net report.

Analysts forecast TSMC to gain $2.98 per stock connected income of $32.7 billion. The institution alternatively reported past nighttime that it earned $3.14 per stock connected income of $33.7 cardinal -- $1 cardinal much than projected.

TSMC grew its income 25% twelvemonth implicit year, and net roseate 35%. The institution scored a 62.3% gross nett margin, a 54% operating nett margin, and 48.3% for its nett margin.

TSMC broke down its semiconductor shipments arsenic follows: 28% of full wafers shipped were 3-nanometer chips, 35% were 5-nanometer, and 14% were 7-nanometer. Such "advanced" chips, therefore, accounted for 77% of the company's business. CFO Wendell Huang predicts "continued beardown request for our leading-edge process technologies" successful the archetypal 4th of 2026.

In dollars and cents, TSMC guided investors to expect Q1 gross of $34.6 cardinal to $35.8 billion, implying sequential maturation of up to 9%. Management says nett margins should beryllium successful the 63% to 65% scope (gross) and 54% to 56% (operating).

So not lone are revenues improving, but TSMC expects to gain adjacent much nett connected each dollar of gross it books. What does this mean for investors?

TSMC's good connected people to gain at slightest its expected $2.80 per stock this year, and astir apt more. It's increasing net overmuch faster than the 33% forecast by analysts for this year, and is apt to outperform its semipermanent 29% net maturation forecast arsenic well.

Even astatine its existent P/E ratio of astir 25, TSMC banal looks similar a bargain to me.

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