Taiwan Semiconductor Manufacturing Company Heads into Earnings with Wedbush Expecting Continued AI Driven Growth

Taiwan Semiconductor Manufacturing Company is expected to report second quarter results that exceed expectations, with Wedbush analysts highlighting strong revenue trends and sustained demand for advanced semiconductor technologies as potential catalysts for an upgraded outlook.

Wedbush has reiterated its Outperform rating ahead of TSMC’s earnings release, noting that the company’s monthly revenue figures suggest it likely surpassed the firm’s prior second quarter top line estimate by approximately 1%, mirroring the previous quarter’s performance. The analysts anticipate gross margins will have at least reached the midpoint of TSMC’s prior guidance range, with results appearing to track closely with expectations throughout the quarter.

Looking forward, Wedbush expects TSMC could provide an improved revenue outlook for the full year. The company previously guided for sales growth exceeding 30% in US dollar terms, whilst revenue growth has been tracking in the high 30% range year to date. Wedbush noted that the ramp of TSMC’s 2 nanometre process technology in the second half of 2026 could support at least mid 30% annual sales growth.

The analysts added that such an outcome could lead to higher 2026 estimates and reduce the magnitude of the slowdown they currently model for 2027.

Wedbush also identified gross margins as a key area to monitor, with the firm and consensus forecasts currently expecting some pressure in the second half of the year due to the 2nm launch and expanded overseas manufacturing capacity. The analysts suggested that third quarter guidance should provide more visibility into how those factors will affect profitability, whilst recent currency movements could provide some benefit.

Capital spending will also be closely watched, with Wedbush noting that sustained demand for advanced nodes could prompt TSMC to raise its annual capital expenditure outlook again. The analysts observed that this would further support the view that current 2027 revenue growth expectations may be too conservative.

Wedbush described TSMC as one of its preferred hardware investments, citing the company’s position in advanced semiconductor manufacturing and packaging as a key beneficiary of the ongoing artificial intelligence data centre build out and future edge AI opportunities across areas including optics, robotics, automotive technology and electronic design automation.

Shares of TSMC traded at $417 on Wednesday afternoon, having gained more than 37% so far this year.