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Additional Reading from MarketBeat Media TSMC's Strong Guidance Supports the Stock's Hot Start to 2026By Leo Miller. Article Published: 1/15/2026. 
Summary - TSMC shares are already winning in 2026, posting very significant gains just weeks into the year.
- The company received good news from the U.S. government, which will aid its operations in China.
- Its latest earnings also impressed, with the firm providing strong guidance for 2026 and beyond.
After a fantastic 2025, shares of Taiwan Semiconductor Manufacturing (NYSE: TSM) aren't looking back to start the new year. Following their 55% return last year, TSMC shares are already up more than 12% in 2026. Two key developments are helping the stock move higher: export-control news and the company's earnings. These developments reinforce the bullish outlook on TSMC and make the stock one of the best ways to play the artificial intelligence investment theme. All data is as of the Jan. 15 close unless otherwise indicated. United States Supports TSMC's Mature Node Operations in China To start the year, reports emerged that the U.S. government granted a key license to TSMC that supports its business in China. The United States will allow the company to import domestically made chip-manufacturing equipment to its plant in Nanjing, China, enabling the facility to continue operating without interruptions or production delays. On Jan. 2, TSMC shares rose by over 5% after the news was announced following the close on Jan. 1. AI is creating 1,600 new millionaires every single day. At the center of this frenzy sits Nvidia, now valued at $4.5 trillion. But most investors don't know Nvidia has three secret partners, smaller companies that play almost impossible-to-replicate roles in GPU development. Without them, Nvidia's business would be hamstrung. Because they're largely ignored, these companies trade at far more attractive valuations, giving you a way to capitalize on Nvidia's dominance without buying Nvidia itself. This is a pivotal moment for AI, but winning this trend requires playing smart, not reckless. See the full 2026 AI investment playbook and all three secret partners. The Jan. 2 surge was likely not driven solely by the license—Nanjing produced a relatively small percentage of TSMC's total revenue (about 2.4% of total revenue in 2024), so the direct financial impact of the announcement is limited. Rather, the upward momentum that day is best understood in the context of the broader semiconductor sector, which traded higher overall. For example, the iShares Semiconductor ETF (NASDAQ: SOXX) rose almost 4.2% that day, suggesting the export-news was a "cherry on top" that helped TSMC outpace its industry peers. TSMC Posts Earnings Beats, Guidance Shines More consequential news arrived on Jan. 15. Shares rose roughly 4.4% that day as markets reacted to the company's latest earnings report for Q4 2025. TSMC reported revenue of $33.7 billion, a year-over-year increase of 25.5%, well above estimates of $31.9 billion (about 18.7% growth). The company's bottom-line metrics were even more impressive. TSMC generated diluted earnings per American Depository Receipt (ADR) of $3.14, a 40% gain versus a year ago, comfortably beating estimates of roughly $2.82 (26% growth). Even more notable than 2025's results were the company's forward-looking projections. In U.S. dollars, TSMC forecasts full-year revenue to rise by "close to 30%" in 2026, implying only a slight deceleration from 2025's full-year sales growth of 31.6%—a result that relieved investors who had expected a sharper slowdown. The company also raised its long-term guidance. Over the five-year period starting in 2024, TSMC now expects U.S. dollar revenue to increase at a compound annual growth rate (CAGR) near 25%, up from its prior long-term guidance of 20%. In AI-accelerator-specific revenue, TSMC boosted its outlook as well, projecting this revenue stream to approach a "mid-to-high 50% CAGR" from 2024 to 2029—well above the previous mid-40% CAGR estimate for that period. Further supporting the long-term outlook was TSMC's capital expenditure (CapEx) guidance. At the midpoint, the company expects to spend $54 billion on CapEx in 2026, roughly a 32% increase over 2025's CapEx of $40.9 billion. Firms typically don't commit to such material CapEx increases unless they're confident in sustained demand, since these investments take years to generate returns. This suggests TSMC sees significant opportunity ahead, especially in megatrends like 5G, AI, and high-performance computing (HPC). The company noted, however, that depreciation expense should rise significantly in 2026 and that the expanding scale of overseas operations will likely weigh on gross margin by 2% to 4% over the coming years. Still, these are manageable trade-offs to support the robust demand the company anticipates. Updated Price Target Projects Significant Gains Ahead for TSMC Overall, TSMC remains a stalwart in the semiconductor and AI investment themes. The company continues to perform well and to raise its forecasts, which reinforces a bullish case for the stock. The consensus price target of $365 implies roughly 7% upside. After the results, analysts at Needham and Company raised their target from $360 to $410, implying about 20% upside.
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