TSMC Struggles to Impress Despite Record Results as AI Semiconductor Rally Cools

Taiwan Semiconductor Manufacturing Company reported record third-quarter results—NT$1.49 trillion (US$46.7 billion) in revenue, up 50% year-over-year and surpassing guidance—yet failed to reverse investor skepticism after a blistering rally in AI hardware stocks lost momentum. TSMC's stock fell approximately 4% following the October 2026 earnings announcement, despite beating revenue expectations and posting a projected 65% jump in quarterly profit, marking the company's sixth consecutive record quarter. The disconnect reflects a broader cooling in semiconductor valuations after the industry's AI-driven surge, with the Morningstar Global Next Generation Artificial Intelligence Index rising only 6% in the third quarter compared to a 42% gain in the second, and declining 29% from its June peak as investors demanded stronger earnings growth to justify elevated prices.