TSMC (TSM) Reports +36% Revenue Jump in Q2, Raises 2026 Outlook
Key Takeaways
- Second quarter revenue reached US$40.20 billion, up 36.0% year-over-year and 12.0% sequentially, at the high end of guidance.
- Diluted EPS came in at US$4.31, a 77.4% increase year-over-year, exceeding analyst estimates.
- Gross margin expanded to 67.7%, supported by strong demand for advanced process nodes.
- Advanced technologies (7-nanometer and below) accounted for 77% of wafer revenue, with 2-nanometer ramping up.
- The company raised its full-year 2026 revenue growth outlook to slightly above 40%.
- Shares showed limited movement in regular trading following the release, with modest after-hours adjustment.
Why These Results Matter
TSMC serves as the world’s leading contract chip manufacturer, producing semiconductors for major technology firms including those driving artificial intelligence applications. The second quarter results highlight continued momentum in high-performance computing, which has become the dominant revenue driver. Investors closely monitor these reports for signals on AI-related capital spending and technology adoption trends, given TSMC’s central role in the global semiconductor supply chain. Strong quarterly performance often influences broader market sentiment toward the sector.
Breaking Down the Q2 Figures
For the second quarter ended June 30, 2026, TSMC reported consolidated revenue of NT$1,270.38 billion (US$40.20 billion), representing a 36.0% year-over-year increase and a 12.0% sequential gain. Net income rose 77.4% year-over-year to NT$706.56 billion. Diluted earnings per share reached NT$27.25 (US$4.31 per American depositary receipt). Gross margin stood at 67.7%, operating margin at 60.3%, and net profit margin at 55.6%. Revenue exceeded the company’s guidance range of US$39.0 billion to US$40.2 billion and topped analyst forecasts of approximately US$39.94 billion. Advanced process technologies accounted for 77% of wafer revenue, underscoring demand for cutting-edge nodes. I also checked this using Tickeron’s AI Screener to compare the stock against peers in the sector.
Market Reaction and Sentiment
Following the July 16, 2026, release, TSM shares exhibited modest movement during regular trading hours. The results, which included a raised full-year outlook, reinforced positive sentiment around AI-driven demand. Some investors noted the company’s increased capital expenditure plans, including additional commitments in Arizona, which contributed to a slight after-hours pullback as the market digested implications for near-term margins.
Using AI Tools to Refine the Picture
In my own workflow, I regularly turn to Tickeron’s AI Screener when evaluating earnings releases like this one. The tool lets me filter thousands of stocks and ETFs by technical patterns, fundamentals, volatility, and AI-driven signals, making it easier to spot how TSM stacks up against other names in the semiconductor space. Customizable screens for industry, market cap, price patterns, and performance metrics help surface trade ideas and breakout candidates without spending hours on manual research. I find it especially useful for quickly confirming whether a name showing strong AI exposure is also appearing on other investors’ radars.
Forward Outlook and Factors to Watch
Management provided third-quarter 2026 guidance calling for revenue between US$44.6 billion and US$45.8 billion. Gross margin is expected in the 65% to 67% range, and operating margin between 56% and 58%, assuming an exchange rate of 32 New Taiwan dollars per U.S. dollar.
Investors should watch the continued ramp of 2-nanometer technology and overall utilization rates across advanced nodes. Demand signals from artificial intelligence customers remain a key focus, as high-performance computing platforms now represent a significant portion of revenue. Additional factors include currency fluctuations, given the impact of exchange rates on reported margins, and progress on capacity expansions. The company’s updated full-year growth target offers further context for assessing sustained momentum through the remainder of 2026.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
TSM's Stochastic Oscillator is staying in oversold zone for 7 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
Following a +1 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 .
The Aroon Indicator entered an Uptrend today. In of 277 cases where TSM Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on July 09, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on TSM as a result. In of 80 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for TSM turned negative on July 02, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 43 similar instances when the indicator turned negative. In of the 43 cases the stock turned lower in the days that followed. This puts the odds of success at .
TSM moved below its 50-day moving average on July 13, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for TSM crossed bearishly below the 50-day moving average on July 20, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over 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 30, 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 71, placing this stock better than average.
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 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 Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. TSM’s price grows at a higher 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 (11.325) is normal, around the industry mean (16.043). P/E Ratio (34.964) is within average values for comparable stocks, (223.855). Projected Growth (PEG Ratio) (1.019) is also within normal values, averaging (1.649). Dividend Yield (0.009) settles around the average of (0.015) among similar stocks. P/S Ratio (16.260) is also within normal values, averaging (42.409).
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General Information
a manufacturer of integrated circuits, silicon wafers, diodes and related semiconductor components
Industry Semiconductors