When Nvidia (NVDA) CEO Jensen Huang talks, the chip world listens. Huang just wrapped up a speech in Taiwan at COMPUTEX 2026 and dropped a line that sent a clear signal: AI has become “insanely profitable” for Taiwan Semiconductor (TSM). Those words capture exactly why TSM stock remains in a league of its own.
Over the past few months, semiconductor stocks have ridden a wave of AI infrastructure spending, but few companies touch every part of that wave like Taiwan Semiconductor (TSMC). While graphics processors and custom AI accelerators battle for design wins, TSMC simply prints both.
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That kind of positioning turns hype into hard cash. Huang’s comment wasn’t just a friendly shoutout. It was a reminder that no matter who wins the AI arms race, the world’s most advanced fab is already counting the profits.
Apple’s Next Chips Anchor Early 2nm Production Ramp
Taiwan Semiconductor is the world’s largest dedicated chip foundry. It manufactures the brains inside Apple (AAPL) iPhones, Nvidia GPUs, AMD (AMD) processors, and a growing army of AI accelerators. Think of it as the pick-and-shovel powerhouse of the digital age.
The company isn’t coasting on old wins. Volume production of cutting-edge 2-nanometer chips kicked off in 2026, with Apple’s next A-series processor becoming the first high-volume customer. Meanwhile, TSMC's Arizona fab started pilot runs, chipping away at geopolitical concentration worries. These milestones extend TSMC’s technology lead and add a geographical hedge that could unlock fresh government incentives, making the investment story even more durable.
TSMC Stock Doubles as AI Demand Fuels Rally
TSM stock has delivered a monster year. Over the last 12 months, shares have rocketed roughly 97%, leaving the broader sector’s gain in the dust. Year-to-date (YTD) in 2026, the rally has kept charging with a gain of about 39%. Insatiable AI demand and rock-solid pricing power are fueling the move. On the technical side, the stock is holding comfortably above its 50-day and 200-day moving averages, flashing a bullish signal across the board.
The valuation makes you pause and think. The price-to-book ratio sits near 11.8 times, well above the sector median, so TSM stock is hardly a bargain. But the forward price-to-earnings (P/E) ratio of 27.9 times actually comes in below the sector median. That tells you the market is pricing in a lot of growth, yet not demanding an absurd premium for it.
www.barchart.com Why Nvidia CEO Jensen Huang’s Comment Matters for TSMC
Huang’s “insanely profitable” remark lit up trading screens. Investors immediately connected the dots. If the godfather of AI acceleration is calling out TSMC by name, the foundry’s order pipeline must look extraordinary.
More importantly, Huang's comment reinforced the idea that TSMC is the non-negotiable linchpin of the entire AI supply chain. Merchant GPUs or custom ASICs, it doesn’t matter. Every advanced chip road leads back to its fabs.
TSMC Delivers Another Blowout Quarter
TSMC reported a stronger-than-expected first quarter, with revenue rising to $35.8 billion, up 35% year-over-year (YOY).
Net profit soared 58% to $18 billion, while diluted earnings per ADR came in at $3.49, reflecting continued strength in advanced chip demand.
TSMC said its high-performance computing segment accounted for 61% of total revenue. Meanwhile, smartphones contributed 26%, IoT brought in 6%, and automotive came in at 4%. The company also noted that advanced technologies made up 74% of wafer revenue, underscoring its shift toward leading-edge production.
For Q2, TSMC guided revenue between $39 billion and $40.2 billion, with gross margin expected in the 65.5% to 67.5% range. The company also reported cash and marketable securities of about $106 billion, while operating cash flow reached roughly $22 billion for the quarter.
Wall Street has penciled in full-year revenue of roughly $160 billion and adjusted earnings near $15.30 per ADR, numbers that would mark another record-breaking year.
What Do Analysts Think of TSM Stock?
Analyst sentiment remains overwhelmingly positive. In January, Morgan Stanley analyst Charlie Chan lifted his price target on TSM stock to NT$2,088, while Goldman Sachs gave a “Conviction Buy” rating and a NT$2,600 target. Finally, JPMorgan analyst Gokul Hariharan issued a NT$2,500 target in April.
According to Barchart data, the consensus rating stands at a “Strong Buy." The average price target of $450.46 offers about 7% potential upside from current levels.
www.barchart.com On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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