TSMC Surges Over 5% Pre-Market as Record Revenue Poised to Help TSM Recoup All November Losses

TradingKey - TSMC (TSM) extended its pre-market gain to 5% on Wednesday, with its stock price rising to $418. If this trend carries into the open, the cumulative decline since November is poised to be fully erased. Record-high revenue, persistently robust artificial intelligence demand, and the company's expanding investments across the AI supply chain have jointly improved market expectations for its growth prospects.

Source: TradingView

Data released by TSMC showed that consolidated revenue for October reached NT$586.89 billion (approximately $17.9 billion), up 14.7% month-over-month and surging 59.7% year-over-year to set a single-month record high. Cumulative revenue for the first ten months of this year reached approximately NT$4.49 trillion, up 43.3% year-over-year. The strong performance indicates that amid recent sharp volatility in global tech stocks, orders for AI chips, custom accelerators, and advanced process nodes continue to provide stable support for the company.

In terms of business breakdown, demand for high-end chips from artificial intelligence servers remains the primary growth driver, while capacity for the 2-nanometer process and advanced packaging is also accelerating ramp-up. TSMC expects fourth-quarter revenue to range between $52.3 billion and $54.3 billion and has raised its full-year U.S. dollar revenue growth forecast to approximately 44%. This indicates that the company's near-term growth has not noticeably cooled despite market skepticism over AI return on investment; rather, it continues to benefit from major cloud service providers expanding computing power infrastructure.

Meanwhile, TSMC's board of directors approved investments of up to $500 million each in Anthropic and OpenAI, bringing the total potential investment to $1 billion. Among them, the investment in Anthropic is planned at its initial public offering price, while the investment in OpenAI is slated to be completed through preferred shares. Although modest relative to TSMC's overall scale, these investments demonstrate that the company is seeking to move beyond being merely a chip manufacturer and further strengthen strategic ties with core AI model developers.

The company also raised its third-quarter cash dividend to NT$9 per share, up from NT$7 in the prior quarter, and approved a capital budget of approximately $40.9 billion for advanced process nodes, packaging capabilities, and fab construction. The dividend increase signals that cash flow remains sound, while continued capacity expansion reflects management's confidence in medium- to long-term order demand. However, heavy capital expenditure also means TSMC must maintain high capacity utilization rates to prevent depreciation expenses from eroding profit margins.