Taiwan Semiconductor Manufacturing Company (TSM) shares hit all-time highs Tuesday, and things could get interesting Thursday when the chipmaking giant reports fourth-quarter results before the bell. But here's the twist: the earnings might not even be the main event.
What Wall Street Expects
Analysts are looking for fourth-quarter revenue of $32.63 billion, up from $26.88 billion in the same period last year, according to data from Benzinga Pro. For earnings per share, the consensus sits at $2.71, compared to $2.24 in last year's fourth quarter.
Those would be impressive numbers, but Taiwan Semiconductor has made a habit of this. The company has beaten revenue estimates for 10 straight quarters and exceeded EPS expectations for more than 10 consecutive quarters. Management's own guidance calls for revenue between $32.2 billion and $34.4 billion, so another double beat looks likely.
The Trade Deal That Could Change Everything
While an 11th consecutive double beat would normally be the headline, there's potentially bigger news brewing. Reports suggest Taiwan Semiconductor is planning a massive expansion of its U.S. manufacturing presence as part of a possible trade deal with the Trump administration.
The details are eye-catching: Taiwan Semiconductor could commit to building five additional facilities in Arizona, effectively doubling its presence in the state. In exchange, President Donald Trump would reportedly cut tariffs on Taiwan to 15%.
This isn't just about tariffs and factories. Taiwan Semiconductor is the crucial manufacturing partner behind some of America's most important tech companies, including NVIDIA Corporation (NVDA) and Apple Inc. (AAPL). A deal like this would improve the company's financial position while strengthening its relationship with the U.S. government at a time when semiconductor manufacturing has become a matter of national interest.
What to Watch Thursday
Given that a growing portion of Taiwan Semiconductor's revenue comes from U.S. partners, maintaining strong relationships with American companies and the government remains critical. Expect analysts on the earnings call to press executives about the potential Arizona expansion and what it means for the company's strategic positioning.
Recently reported monthly and quarterly data from the company suggest Thursday's double beat is practically baked in. The real question is what comes next. Commentary on demand trends, particularly around AI chip sales, could drive the stock higher. Growth in AI chip production has been strong for Taiwan Semiconductor's business and margins, and investors will want to hear that momentum continues.
Stock Performance
Taiwan Semiconductor shares traded flat at $331.98 on Tuesday, after hitting new 52-week and all-time highs earlier in the session. The stock has surged 64.8% over the past year, trading in a 52-week range of $134.25 to $336.42.