TSMC's (TSM) Q1 2026 Earnings: +35.1% Revenue Growth Amid AI Demand Surge
Key Takeaways
- TSMC reported Q1 2026 revenue of $35.90 billion, a 35.1% increase year-over-year (YoY) and 6.4% quarter-over-quarter (QoQ), surpassing consensus estimates around $35.5 billion.
- Diluted earnings per share (EPS) reached NT$22.08 ($3.49 per American Depositary Receipt or ADR), up 58.3% YoY, beating analyst expectations of NT$20.88.
- Gross margin expanded to 66.2%, with advanced technologies (7nm and beyond) comprising 74% of total wafer revenue.
- Net income soared 58.3% YoY to NT$572.48 billion, driven by robust demand for AI and high-performance computing chips.
- Q2 2026 guidance projects revenue of $39.0–$40.2 billion, with gross margin of 65.5%–67.5%.
- TSM shares fell about 3% on earnings day amid mixed reactions to guidance.
Earnings Context and Why It Matters
As the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Company (TSMC) plays a central role in powering the semiconductor industry, producing advanced chips for major players like Nvidia and Apple. From what I see, these Q1 2026 earnings stand out amid the surge in AI demand that's been driving TSMC's momentum. With advanced nodes now making up the bulk of revenue, the results underscore TSMC's key position in the AI expansion and its ability to navigate geopolitical challenges. Investors like me keep a close eye on these reports for insights into chip supply chains, capacity expansions, and margin trends that can influence the entire tech sector.
Q1 2026 Reported Results
TSMC posted impressive results for the first quarter ended March 31, 2026. Consolidated revenue came in at NT$1,134.10 billion ($35.90 billion), beating the company's prior guidance midpoint as well as Wall Street estimates. This represented a 35.1% YoY increase from Q1 2025's NT$839.45 billion and an 8.4% QoQ gain from Q4 2025.
Diluted EPS rose to NT$22.08 ($3.49 per ADR), surpassing the consensus of NT$20.88 and marking a 58.3% YoY improvement. Net income hit NT$572.48 billion, up 58.3% YoY and 13.2% QoQ. The margins were particularly strong: gross margin at 66.2% (exceeding the January guidance of 63.0%–65.0%), operating margin at 58.1%, and net margin at 50.5%.
What stands out is the performance of advanced technologies, with 3nm accounting for 25% of wafer revenue, 5nm at 36%, and 7nm at 13%, for a total of 74%. This mix, fueled by high-performance computing (HPC) demand, drove the earnings beat. I also checked these metrics against industry peers using Tickeron’s AI Screener, which highlighted how TSM is pulling ahead in advanced nodes.
Market Reaction and Investor Sentiment
Even with the earnings beat, TSM shares dropped about 3.13% on April 16, closing at $363.35 after early pre-market gains dissipated. In my view, the caution stemmed from Q2 guidance that, while solid, didn't fully align with the explosive AI narrative some expected, coupled with worries about capex levels and regional tensions. That said, sentiment stays constructive on the long-term AI drivers, with analysts noting the margin gains and strength in advanced nodes.
A Tool That's Helping My Research: Tickeron's AI Screener
In analyzing stocks like TSM, I rely on Tickeron’s AI Screener to cut through the noise. This AI-powered tool lets me scan thousands of stocks and ETFs with custom filters for technical patterns, fundamentals, trends, volatility, and AI signals. It surfaces trade ideas, breakout candidates, and opportunities far faster than manual methods, which has sharpened my edge in spotting leaders like TSMC in the semiconductor space.
Forward Outlook and Key Factors to Monitor
TSMC's guidance for Q2 2026 points to ongoing strength, with revenue forecasted at $39.0–$40.2 billion (midpoint suggesting about 12% QoQ growth) and gross margins of 65.5%–67.5%. This outlook reflects persistent demand for cutting-edge nodes as AI accelerators ramp up.
One thing I'm watching closely is the advanced technology mix, already at 74%, with further scaling in 3nm and below. Management highlighted robust HPC demand, critical for AI chips, and full-year 2026 capex is set at $38–$42 billion to build capacity. I’ve been tracking these trends with Tickeron’s AI Trend Prediction Engine to gauge momentum.
On the risk side, keep an eye on U.S.-China trade issues, Taiwan Strait geopolitics, and supply chain strains. Monthly revenue updates (next one on May 8) and Q2 close reports will provide more clarity on demand. Also worth monitoring are margin impacts from expansion costs, customer inventory levels, and signs of recovery in smartphones and PCs.
Disclaimer
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Aroon Indicator for TSM shows an upward move is likely
TSM's Aroon Indicator triggered a bullish signal on June 03, 2026. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 258 similar instances where the Aroon Indicator showed a similar pattern. In of the 258 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on May 26, 2026. You may want to consider a long position or call options on TSM as a result. In of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for TSM just turned positive on May 28, 2026. Looking at past instances where TSM's MACD turned positive, the stock continued to rise in of 44 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where TSM advanced for three days, in of 324 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The 10-day RSI Indicator for TSM moved out of overbought territory on June 03, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 51 similar instances where the indicator moved out of overbought territory. In of the 51 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 69 cases where TSM's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where TSM declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
TSM broke above its upper Bollinger Band on June 01, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 62, placing this stock better than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. TSM’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (11.521) is normal, around the industry mean (18.179). P/E Ratio (35.578) is within average values for comparable stocks, (295.250). Projected Growth (PEG Ratio) (1.293) is also within normal values, averaging (1.839). Dividend Yield (0.008) settles around the average of (0.015) among similar stocks. P/S Ratio (16.556) is also within normal values, averaging (65.615).
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General Information
a manufacturer of integrated circuits, silicon wafers, diodes and related semiconductor components
Industry Semiconductors
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