Key contract chipmaker Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) delivered stronger-than-expected first-quarter revenue, with analysts pointing to sustained AI demand and favorable industry trends despite geopolitical and cost pressures.

The stock gained in the premarket on Friday after the results.

Revenue Beats Estimates As AI Demand Holds Firm

Taiwan Semiconductor reported a 35.1% year-over-year increase in quarterly revenue to about 1.13 trillion New Taiwanese dollars ($35.6 billion), exceeding analyst estimates of 1.12 trillion New Taiwanese dollars, with March sales rising 45.2%.

The performance indicates that demand for AI chips remained resilient even as tensions in the Middle East disrupted shipping routes and increased energy costs.

The company, a key supplier to Nvidia Corp. (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL), continues to benefit from global AI infrastructure spending, helping ease investor concerns about a potential slowdown.

Analyst Sees Margin Upside And Strong Node Demand

The company will report its full first-quarter earnings on April 16.

Bloomberg Intelligence said Taiwan Semiconductor is likely to exceed first-quarter guidance and analyst estimates, supported by strong demand for advanced chips used in artificial intelligence. Gross margin could reach about 65%, aided by a stronger U.S. dollar.

Investors are expected to focus on the company’s outlook for smartphone and PC demand, potential cost pressures, and whether sustained AI growth could lead to an increase in its long-term margin target above 58%, analyst Charles Shum said.

Technical Analysis

At $366.42, TSM is trading 9.4% above its 20-day simple moving average (SMA), the stock’s average price over the last 20 sessions, which suggests buyers still control the near-term trend. It’s also 13.9% above its 100-day SMA, indicating the intermediate uptrend remains intact despite recent volatility.

The moving average structure is mixed: the 20-day SMA is below the 50-day SMA, a setup that can signal cooling momentum after a strong run, even as the longer-term trend remains constructive. The moving average convergence divergence (MACD), a trend/momentum measure, is bullish, with the MACD line at 1.3322 above the signal line at -2.3988, consistent with upside pressure rebuilding.

The stock is still trading in the upper part of its 52-week range ($137.90 to $390.20), suggesting the market continues to price in strong longer-term expectations. Over the last 12 months, shares have been up 141.84%, a backward-looking gain that shows how powerful the broader trend has been.

  • Key Resistance: $380.00 — a level where rallies have recently stalled.
  • Key Support: $332.00 — an area where buyers have tended to step in.

Earnings & Analyst Outlook

The countdown is on: Taiwan Semiconductor is set to report earnings on April 16, 2026 (confirmed).

  • EPS Estimate: $3.29 (Up from $2.12 YoY)
  • Revenue Estimate: $35.50 Billion (Up from $25.53 Billion YoY)
  • Valuation: P/E of 35.2x (Indicates premium valuation relative to peers)

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $401.67. Recent analyst moves include:

  • DA Davidson: Initiated with Buy (Target $450.00) (February 13)
  • Barclays: Overweight (Raises Target to $450.00) (January 16)
  • TD Cowen: Hold (Raises Target to $370.00) (January 16)

Top ETF Exposure

  • Invesco FTSE RAFI Emerging Markets ETF (NYSE:PXH): 6.23% Weight
  • Dan IVES Wedbush AI Revolution ETF (NYSE:IVES): 5.81% Weight
  • Harbor International Compounders ETF (NYSE:OSEA): 6.88% Weight

Significance: Because TSM carries such a heavy weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.

Price Action

TSM Stock Price Activity: Taiwan Semiconductor shares were up 1.98% at $372.74 during premarket trading on Friday, according to Benzinga Pro data.

Photo by Jack Hong via Shutterstock