Nvidia’s go-to chipmaker TSMC sees revenue top estimates

Taiwan Semiconductor Manufacturing Co.’s revenue beat forecasts, boosting hopes that global AI spending will be sustainable in 2026 despite industry bubble concerns.

Nvidia Corp.’s preferred chipmaker posted a roughly 20% increase in revenue in the December quarter to NT$1.05 trillion ($33.1 billion), according to calculations based on monthly figures. This compares with the average estimate of NT$1.02 trillion.

Artificial intelligence boom is accelerating growth

As demand for data center chips soars, Nvidia executives this week expressed optimism about a brighter revenue outlook, countering fears that infrastructure building is outpacing the adoption of artificial intelligence. TSMC, one of Apple Inc.’s major chipmakers, may also have gained strength from the strong sales of the iPhone 17, which was released in September.

TSMC has been one of the biggest beneficiaries of the post-ChatGPT AI boom, taking on its central role in the production of advanced AI accelerators. Global tech giants from Microsoft Corp. to Meta Platforms Inc. are collectively spending more than $1 trillion on data center projects to capitalize on growing AI adoption, but investors worry that capacity on the train will exceed actual usage.

The cyclical nature of many of these data center arrangements, where investments and spending move back and forth between OpenAI and several publicly traded tech giants, also concerns Wall Street.

TSMC will report its full quarterly earnings next week, along with its 2026 capital spending forecast. Last year, the company benefited from rush orders as customers stocked up on chips before U.S. tariffs took effect. It has set aside $40 billion to $42 billion for expansion and improvements in 2025.

Multiple brokerage firms, including JPMorgan Chase, have raised their price targets for TSMC since the beginning of the year, citing expectations for strong revenue growth and improving profitability.