Taiwan Semiconductor Manufacturing Co. (TSM) is having the kind of 2026 that Nvidia Corp. (NVDA) enjoyed for most of the past two years. The Taiwanese chipmaker is up roughly 10% year-to-date after shares spiked 4% Thursday morning, powered by an earnings report that beat on basically everything. Meanwhile, Nvidia has drifted down about 2% over the same stretch.

It's an early signal that semiconductor leadership might be spreading beyond the narrow handful of names that dominated 2023 and 2024.

TSMC's Quarter Was Absurdly Good

Let's run through the numbers. TSMC posted fourth-quarter gross margin of 62.3%, comfortably above the 60.6% analysts expected. Earnings per share came in at $3.09, crushing the Street's $2.90 estimate. Revenue hit a record $33.1 billion, edging past the $33 billion consensus.

But the real story was in the guidance. Management expects first-quarter gross margin between 63% and 65%, with operating margin between 54% and 56%. Both ranges sailed past what the market was expecting. Revenue guidance landed between $34.6 billion and $35.8 billion for the current quarter, well above estimates hovering around $33.2 billion.

TSMC also made it clear this isn't a short-term surge. The company said capital spending will stay elevated for the next three years as it accelerates factory expansions in both the U.S. and Taiwan. Management projected 2026 sales growth near 30% in dollar terms and said hitting a long-term gross margin above 56% is realistic.

What This Means for Portfolio Construction

Here's where it gets interesting beyond just one stock's earnings beat. For years, the Magnificent Seven grabbed most of the spotlight and drove a huge chunk of index returns. That left a lot of portfolios heavily tilted toward a small group of U.S. mega-cap tech names.

Early in 2026, that dominance looks shakier. Investors are starting to branch out, hunting for exposure in global markets and names outside the usual suspects. TSMC's performance is a perfect example of what that shift looks like in practice.

For those looking to dial back Magnificent Seven concentration without ditching tech entirely, a few ETFs offer meaningful TSMC exposure. Three funds stand out with roughly 16% allocations each:

• Global X Emerging Markets ex-China ETF (EEM)
• National Security Emerging Markets Index ETF (NSI)
• SP Funds S&P World ex-US ETF (SPWO)

The takeaway from the early weeks of 2026 is pretty straightforward. Chip leadership isn't a one-name game anymore, and portfolios built around a narrow set of U.S. giants might need a rethink. TSMC's blowout results show there's plenty of growth happening beyond the usual headlines.