Taiwan Semiconductor Manufacturing shares have climbed roughly 39 percent this year through October 15, leaving the S&P 500’s 13 percent gain in the dust, and the latest quarter gives the rally fresh fuel. Revenue jumped 41 percent from a year earlier to $46.7 billion, a record, while the high-performance computing segment that houses AI data-center chips swelled to 68 percent of the total.
Guidance implies another step up
Management guided for fourth-quarter sales between $52.3 billion and $54.3 billion, which at the midpoint works out to about 58 percent year-over-year growth. The forecast assumes the AI accelerator business keeps expanding at a mid- to high-50s annual clip through 2029, but on the October 15 call Chief Executive C.C. Wei said the actual rate “probably will be higher” because demand remains “still far above our capability today to supply.”
Smartphone side feels the squeeze
The picture is less rosy in consumer electronics. Wei flagged cautious planning for 2027 as rising component costs push device makers to raise prices, pressuring the smartphone business that still contributed 21 percent of third-quarter revenue. That segment could act as a drag even as the AI engine roars.
Valuation prices in plenty of growth
The stock changes hands at roughly 19 times analysts’ 2027 earnings estimates while Wall Street models call for annual earnings growth near 38 percent over the next several years. That multiple looks reasonable for the projected trajectory, provided the supply constraint persists and the consumer cycle does not deteriorate faster than expected.