TSM Stock Still Caught In AI Chip Rout Despite Record Q3 Profit And Bright Outlook: Retail Stays Bullish

TSMC said Q4 revenue will rise 61% compared to 51% growth in Q3.

• TSM stock fell in the overnight session ahead of Thursday. 
• The global chip selloff continued amid questions about AI infrastructure spending and rising competition from Chinese chipmakers.
• TSM remains up 42.4% year to date despite recent weakness, and retail sentiment on Stocktwits inched higher in the ‘bullish’ zone.

U.S.-listed shares of Taiwan Semiconductor Manufacturing Co. (TSM) fell 1.7% in overnight trading ahead of Thursday despite a strong quarterly report from the world’s biggest contract chip manufacturer.

Chip stocks in the U.S. and Asia remained under pressure on Thursday, extending the selloff from the past few days, amid fresh concerns about the durability of AI infrastructure spending and chip demand, which also pressured TSM stock.

TSMC Projects Higher Revenue In Q4

Early Thursday, TSM forecast that its fourth-quarter revenue would rise as much as 61% from a year ago, after posting a sixth consecutive quarter of record earnings.

The Taiwanese company’s net profit in the July-to-September period rose 69% to T$763.1 billion ($23.59 billion), beating LSEG SmartEstimate expectations of T$746.3 billion.

TSMC’s third-quarter revenue rose 51% to T$1.49 trillion, beating market forecasts, according to a disclosure last week. In dollar terms, sales rose 41%.

Over the past year, TSMC raised its 2026 revenue growth outlook to “slightly above 40%” in dollar terms.

With semiconductor firms ASML Holding NV (AMSL) and Samsung Electronics reporting strong results in recent weeks, TSMC's report allays fears of a slowdown in booming AI infrastructure spending.

Chip Rout Takes Sheen Off TSMC’s Strong Report 

Still, broader concerns related to AI returns continue to weigh across tech stocks. NVDA was down 1.4% in overnight trading, while the iShares Semiconductor ETF (SOXX) dipped nearly 2% on Wednesday, its sixth straight session of decline.

South Korea’s KOSPI dropped 7.5% on Thursday, with sharp declines in SK Hynix and Samsung.

TSM shares also came under pressure amid the global rout. The stock fell in six of the last seven sessions through Wednesday, losing 11.5% cumulatively.

Reports of advances by Chinese memory chipmaker ChangXin Memory Technologies (CXMT) have raised fears of tougher competition for U.S. chip firms, while Broadcom CEO Hock Tan’s recent warning likening AI investments to “casino gambling” has added to questions about whether the massive spending on AI infrastructure will pay off.

Retail View On TSM

TSM was the top trending stock on Stocktwits at the time of writing, with retail sentiment climbing multiple points higher in the ‘bullish’ zone. “$TSM between this and the news about Anthropic's revenue, it’s going to be a Green Day tomorrow for AI/tech stocks,” a trader said.

Anthropic reportedly disclosed its financial performance to select investors on Wednesday, showing third-quarter sales of $16.8 billion, up from $11.6 billion in Q2 and $4.7 billion in Q1.

“$TSM another massively good report and we seem to be completely risk off this week,” said another trader. Despite the recent weakness, TSM stock remains 42.4% up year to date.

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