TSM Shares Rise in Premarket as AI Demand Lifts Outlook Ahead of Q3 Results

Taiwan Semiconductor Manufacturing Company (TSM) shares rebounded sharply in premarket trading Monday, recovering from Friday’s losses as investor enthusiasm for artificial intelligence infrastructure outweighed mounting geopolitical tensions between the U.S. and China. The stock traded at $295.24 in premarket activity, up 5.19%, after closing at $280.66 on Friday. The recovery comes just days before TSMC reports its third-quarter earnings on Thursday, with analysts expecting a 28% jump in profit to a record T$415.4 billion ($13.55 billion), driven by insatiable demand for advanced AI chips.

AI-Driven Demand Sets Stage for Record-High Quarterly Profits

TSMC is forecast to report net profit of T$415.4 billion for the three months through September 30, according to an LSEG SmartEstimate compiled from 20 analysts. Any profit result above T$398.3 billion would mark the company’s highest-ever quarterly net income and its seventh consecutive quarter of profit growth. The company has already flagged a market-forecast-beating rise in third-quarter revenue of 30%, with September consolidated net revenue reaching T$330.98 billion, up 31.4% year-over-year.

Cumulative revenue for the first nine months of 2025 climbed 36.4% to T$2.76 trillion, reflecting robust global demand for advanced semiconductor nodes supporting AI and high-performance computing. IDC group vice president Mario Morales expects TSMC’s revenue to grow at least 30% to 35% this year, noting that “leading chip suppliers such as Nvidia and AMD have only one place to go – TSMC.” The gains are fueled by the company’s accelerated ramp-up of 3-nanometer production and ongoing development of next-generation 2-nanometer technology at facilities in Taiwan and Arizona, underpinned by strong demand from major clients including Apple and Nvidia.

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TSMC Shares Outperform Peers as Analysts Maintain Bullish Outlook

TSMC shares have delivered exceptional returns in 2025, surging more than 42% year-to-date and handily outperforming the Nasdaq 100’s 15% gain over the same period. The stock currently trades with a trailing P/E ratio of 30.77 and a forward P/E of 25.32, reflecting investor confidence in continued earnings growth. With a market capitalization of $1.456 trillion as of Friday’s close, TSMC remains Asia’s most valuable listed company, nearly three times the size of South Korean rival Samsung Electronics.

Wall Street analysts remain bullish on the stock’s prospects, with an average price target of $307.65 suggesting modest upside from current levels. Recent analyst activity includes Susquehanna maintaining a positive rating while raising its price target from $300 to $400 on October 10. The company’s 52-week range spans from $134.25 to $307.30, with the stock currently trading near the upper end of that range. Despite geopolitical concerns around China’s rare earth export controls and U.S. tariff uncertainties, analysts expect TSMC to provide strong fourth-quarter guidance during Thursday’s earnings call scheduled for 0600 GMT, further supporting the bullish sentiment surrounding the stock.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.