#TSM TSMC made the money, while people who bought its stock still have to prove they didn’t overpay. That may be the most frustrating part of today’s earnings report for shareholders.
Third-quarter revenue was $46.72 billion, with an operating margin of 58.7%—both above the company’s previous guidance. The midpoint of its fourth-quarter revenue guidance was raised to $53.3 billion. Even after delivering results like these, the stock briefly fell about 2% in premarket trading after the report.
Anyone holding the stock would want to ask: What more could you want?
Yet management itself offered a sobering caveat: AI demand still far exceeds supply, but rising component costs and macroeconomic pressures are squeezing the consumer market, so the company is taking a cautious approach to planning for 2027.
That made me pause. Server customers are clamoring for capacity, while ordinary consumers have to think twice about their budgets before buying a phone or replacing a computer. Along the same supply chain, upstream players are busy expanding capacity, but end consumers may not feel nearly as confident.
I’m still bullish on TSMC’s business. But the hardest position for shareholders to be in is when the company hasn’t disappointed at all, yet expectations at the time of purchase were simply too high.
If the price already assumes smooth sailing for years to come, even a stellar earnings report may only be enough to meet expectations. Whether the coming capacity expansion can deliver sustained profits will determine if today’s premium is justified.
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