A surge in US equities followed strong earnings from Taiwan Semiconductor Manufacturing Co., with the S&P 500 rising 1.8% and Nasdaq gaining 2.3% after TSMC reported a 24% year-over-year increase in quarterly revenue and a 32% jump in net profit. The results reaffirmed confidence in the AI chip supply chain.
- TSMC reported NT$1.07 trillion ($35.8 billion) in Q4 revenue, a 24% YoY increase
- Net profit rose 32% YoY to NT$396 billion ($133 billion)
- S&P 500 rose 1.8% to 5,423.76; Nasdaq gained 2.3% to 17,801.21
- NVIDIA shares surged 5.1% following TSMC’s results
- TSMC plans 12% increase in 2026 capex, with focus on 2nm and 1.4nm nodes
- Company announced a NT$15/share special dividend ($0.50)
US stock markets extended their rally on Thursday as Taiwan Semiconductor Manufacturing Co. (TSMC) delivered robust fourth-quarter results, reinforcing investor optimism around artificial intelligence-driven semiconductor demand. The S&P 500 closed at 5,423.76, marking its best day since November, while the Nasdaq Composite climbed to 17,801.21, buoyed by a 5.1% surge in NVIDIA's shares following TSMC’s positive guidance. TSMC reported NT$1.07 trillion ($35.8 billion) in revenue for the quarter, a 24% year-over-year increase, and net income reached NT$396 billion ($133 billion), up 32% compared to the same period in 2024. The company also announced a 12% expansion in its capital expenditure for 2026, signaling continued investment in advanced node production, including 2nm and 1.4nm technologies. The strong performance from TSMC, a critical supplier to major AI firms including NVIDIA, Apple, and AMD, served as a bellwether for the broader semiconductor industry. Analysts noted that the company’s ability to maintain high utilization rates across its fabs—currently at 94%—demonstrates sustained demand from AI infrastructure buildouts. The increase in TSMC’s gross margin to 61.5% further highlighted pricing power amid tight supply and rising complexity in chip manufacturing. The rally extended beyond semiconductors, with tech-heavy indices outperforming. The Nasdaq-100 gained 2.7%, while the Philadelphia Semiconductor Index rose 4.3%. Investors also reacted favorably to TSMC’s announcement of a special dividend of NT$15 per share, equivalent to $0.50, which increased its total shareholder return. The move underscored the company’s financial strength and commitment to rewarding investors during a period of record demand. Market participants are now turning attention to upcoming earnings from other semiconductor leaders, including ASML and AMD, with the AI supply chain narrative expected to remain central to equity performance in early 2026.