TSMC (TSM) Stock Falls Despite Blowout Q2 - Is This the Dip to Buy?

TLDR

• TSMC Q2 revenue rose 33.7% year-over-year to $40.2B, with EPS of $4.31, beating estimates by $0.37
• Capital expenditure guidance was raised to $60B–$64B, with an additional $100B U.S. investment bringing total Arizona commitment to $265B
• Advanced technologies made up 77% of wafer revenue; 2nm already contributing 3% in just its first quarter of volume
• Needham raised its price target to $530, while DA Davidson lifted its target to $500; both maintain Buy ratings
• Full-year 2026 revenue growth guidance raised to slightly above 40%, the second upward revision this year

TSMC posted one of its strongest quarters on record, but the stock pulled back as investors processed a major spending ramp. TSM was trading around $385 on Monday, down roughly 3.4% on the day.

Taiwan Semiconductor Manufacturing Company Limited, TSM

Q2 revenue came in at $40.2B, up 33.7% year-over-year. EPS hit $4.31, a 74% jump that beat Wall Street estimates by $0.37.

Gross margins reached a record 67.7% in the quarter. Operating margins expanded to 60.3%, well above industry peers.

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