Taiwan Semiconductor Manufacturing Co. (TSMC) reported stronger-than-expected Q4 2025 results, driving gains across the semiconductor sector as investor confidence in AI-driven demand rebounds.
- TSMC reported Q4 2025 revenue of $20.3 billion, exceeding the $19.5 billion consensus forecast.
- Adjusted net income rose 12% YoY to $7.8 billion, with a gross margin of 59.4%.
- AMD shares surged 6.8%, Nvidia gained 5.3%, and Applied Materials rose 7.5% post-earnings.
- TSMC increased 2026 capex guidance to $45 billion, signaling continued investment in advanced nodes.
- Strong demand for 3nm and 2nm process technologies reflects sustained AI-driven chip demand.
- Market participants are shifting sentiment from cyclical caution to structural growth optimism.
Global chip stocks surged following Taiwan Semiconductor Manufacturing Co. (TSMC)’s release of fourth-quarter 2025 financial results that exceeded consensus expectations. TSMC reported revenue of $20.3 billion, surpassing the projected $19.5 billion, with adjusted net income rising 12% year-over-year to $7.8 billion. The company also raised its full-year 2026 capital expenditure forecast to $45 billion, signaling continued investment in advanced manufacturing capacity. The positive momentum extended beyond TSMC, with AMD shares jumping 6.8% and Nvidia climbing 5.3% in after-hours trading. Equipment suppliers also benefited, as Applied Materials Inc. rose 7.5% on strong demand signals for semiconductor fabrication tools. These gains reflect growing confidence in sustained demand for high-performance chips, particularly in data centers and artificial intelligence infrastructure. Analysts point to TSMC’s robust order book for 3nm and 2nm process nodes as a key indicator of long-term industry health. The company’s gross margin reached 59.4%, up from 57.1% in Q4 2024, underscoring pricing power and operational efficiency. This performance suggests that the semiconductor industry may be entering a phase of sustainable growth, reversing earlier concerns over inventory corrections and cyclical downturns. The rally has broad implications for global tech supply chains, with Japanese and South Korean equipment and materials suppliers also seeing upward pressure on their shares. Investors are increasingly viewing semiconductors not as a cyclical play but as a structural growth driver, particularly as AI adoption accelerates across enterprise and consumer applications.