TSMC Posts a Sixth Straight Record Profit, but the AI Chip Selloff Keeps Rolling

Taiwan Semiconductor Manufacturing, the contract chipmaker behind most of the world's leading-edge AI processors, reported another record quarter on Thursday, October 15, 2026. It beat estimates on profit, revenue and operating margin, and it guided fourth-quarter sales well above consensus. It was exactly the kind of print bulls wanted. The market didn't care much.

TSMC's U.S.-listed shares traded lower before the open, and Nasdaq 100 futures were down more than 1% as a selloff in AI-linked stocks rolled into a second day. The gap between the fundamentals and the price action is the story for anyone trading semiconductors right now.

The numbers: a beat across the board

Net profit attributable to shareholders rose 68.7% year over year to NT$763.1 billion, MT Newswires reported. That beat a FactSet consensus of NT$736.9 billion and topped the previous quarterly record of NT$706.6 billion set in April through June, according to Alliance News. CNBC noted it was TSMC's sixth straight record-profit quarter. Earnings per share were NT$29.43, up from NT$17.44 a year earlier. Per American depositary receipt, TSMC earned $4.60 against a consensus of $4.46, per The Fly.

Revenue rose 50.9% to NT$1.494 trillion, above a Bloomberg consensus of NT$1.46 trillion, according to Finwire. In U.S. dollars, revenue was $46.72 billion, up 41.2% and above the company's own guidance range of $44.6 billion to $45.8 billion.

Margins held up despite heavy new-node costs. Gross margin was 66.4%, up from 59.5% a year earlier and inside the 65% to 67% guidance range, although it dipped from the second quarter, which TSMC attributed to the initial ramp of its 2-nanometer (N2) process. Operating margin came in at 58.7%, above the top of the guidance range at 58%, which CNBC framed as a sign of TSMC's pricing power. Net margin was 51.1%.

The technology mix shows where the money is going. N2 contributed 8% of wafer revenue in its first meaningful quarter, while 3-nanometer chips accounted for 33%, 5-nanometer for 28% and 7-nanometer for 10%, per MT Newswires.

Guidance: a bigger fourth quarter and a higher 2026

TSMC guided fourth-quarter revenue to $52.3 billion to $54.3 billion. At the midpoint that is about 14% higher than the third quarter and 58% higher than a year earlier, CNBC reported. MT Newswires put the FactSet consensus at $50.22 billion, so the low end of the range already cleared the Street. The company did flag a sequential decline in fourth-quarter gross margin as N2 ramps.

CEO C.C. Wei said TSMC now expects 2026 revenue to grow around 44% in U.S. dollar terms, up from a July outlook of more than 40% and above a Street view near 42%. He described demand as "extremely robust" and said AI demand is being fueled by "the rising adoption of agentic AI as we transition from chatbots to AI assistants." CFO Wendell Huang reiterated 2026 capital spending of $60 billion to $64 billion, and the company said capex from 2026 through 2028 should be significantly higher than in the previous three years.

There was one note of caution. Wei said rising component prices and macro uncertainty are still weighing on consumer and price-sensitive end markets, so TSMC is "being prudent in our business planning going into 2027." That nuance matters: the AI data-center engine is running hot, but smartphones and PCs are not carrying the same load.

Why the stock fell anyway

The selloff isn't about TSMC's quarter. It's about the cost of money and who's borrowing it. On Wednesday, after a hotter September consumer price index, the S&P 500 fell 1.11%, its worst day since July, and the Nasdaq Composite dropped 1.88%, per Siebert Financial's morning note. CoreWeave, the heavily indebted data-center operator, fell 15.46% to $65.78.

Reuters reported Thursday that Nasdaq futures fell more than 1% "on fears that higher interest rates will make it harder for companies to fund AI investments." CoreWeave slid another 4.5% premarket, Oracle fell 2% after a nearly 9% drop on Wednesday, and Reuters said both companies' bond yields had hit record highs. Asia was worse: the Wall Street Journal reported South Korea's chip-heavy Kospi fell 7% and Japan's Nikkei almost 5%.

Memory names took the brunt of it in New York. By 8:50 a.m. ET, Benzinga reported SanDisk, Western Digital and Seagate down 5% to 6% premarket and Micron down 4.6%, with Nasdaq 100 futures off 1.22% near 29,586. Around the same time, a Nasdaq premarket tally showed TSM ADRs down $10.05 at $419.95. The Journal summed up the mood: robust results from major AI firms "are failing to lift investors' spirits."

How to read the split

• Demand isn't the worry. A $54.3 billion high-end guide and a raised 2026 growth outlook say AI chip demand is still outrunning supply.
• Funding is the worry. The pressure is concentrated in borrowers like CoreWeave and Oracle and in the most crowded semiconductor trades, which is a rates and credit story more than an earnings story.
• Rates are the swing factor. Reuters cited CME FedWatch at a 27% chance of an October rate hike and 67% for December. Thursday's producer price report only adds to that debate. See our September PPI breakdown.
• The next tests are close. Intel, AMD and Nvidia report in the coming weeks, MT Newswires noted, so TSMC's guide sets the bar for the rest of chip earnings season.

Where Loomi fits

Days like this are when a plan matters more than a hunch. When great earnings meet a falling tape, Loomi's GEX regime view shows whether dealer positioning is likely to cushion or amplify an index slide, and the VIX Gate gives a rules-based read on when volatility is high enough to stand aside or size down. For traders who would rather follow tested rules than react to every headline, the automated strategies run on defined entries and exits, and you can check how they've done on the results and verification pages. Nothing here is a promise of returns. It's about having a process when semis swing 5% before breakfast.

What's next

Thursday also brings earnings from Charles Schwab, PNC, U.S. Bancorp, BNY and Prologis before the bell, with Interactive Brokers, J.B. Hunt and Alcoa among the after-hours reports, per Benzinga's earnings calendar. For the backdrop to this week's chip slide, see our earlier pieces on the CXMT memory-chip selloff and September's 3.7% CPI.

— Rowan Ellery, Markets Editor, Loomi.Ai. Questions or corrections? See our research methodology.

FAQ

Loomi.Ai provides educational market research, not financial advice. Nothing here is a recommendation to buy or sell any security. Trading stocks, futures and options involves substantial risk of loss. Estimates and schedules cited were current at publication and can change.

Sources

• TSMC's Quarterly Profit Surges 69% to Record, Topping Estimates on AI Chip Demand, MT Newswires via Bigdata
• Taiwan Semiconductor Sees Sequential Fourth-Quarter Gross Margin Decline; Issues Upbeat Revenue Outlook, MT Newswires via Bigdata
• TSMC posts record profit for a sixth straight quarter, beating estimates on AI boom, CNBC via Bigdata
• TSMC reports Q3 EPS $4.60, consensus $4.46, The Fly via Bigdata
• TSMC beats expectations (update), Finwire via Bigdata
• Chipmaker TSMC says net profit hit record in third quarter, Alliance News via Bigdata
• Nasdaq futures dive 1% as AI rout deepens on debt concerns, Reuters via Investing.com
• Stock Market Today: Tech Selloff to Extend Into Second Day, The Wall Street Journal
• AI Isn't the Bubble. The Debt Might Be., Siebert Financial via Bigdata
• Producer Inflation Jumps to 6.3%, Exceeding Estimates (market reaction), Benzinga via Bigdata
• Pre-Market Most Active for Oct 15, 2026, Nasdaq via Bigdata
• Earnings Scheduled For October 15, 2026, Benzinga via Bigdata