TSMC Just Reignited the AI Boom -- Here's What Wall Street Missed

Taiwan Semiconductor Manufacturing Co. TSM just gave the AI trade a fresh shot of adrenaline. The world's top chip foundry raised its 2025 revenue growth forecast to around 30%, up from the mid-20% range it had guided previously. That revision is more than just a numberit signals that demand from Nvidia, AMD, and the hyperscaler crowd is still running hot. CEO C.C. Wei doubled down, saying AI-related orders remain strong despite growing noise around Trump-era tariffs and currency headwinds. The stock popped, Nasdaq futures swung green, and ASMLone of TSMC's key suppliersclimbed more than 2% after being hammered the day before.

TSMC's updated guidance landed just as questions were swirling about a possible cooldown in AI infrastructure spend. But with Nvidia recently crossing a $4 trillion valuation and U.S. regulators preparing to greenlight AI chip exports to China, the narrative seems to be shifting again. Wei cautioned that it's still too early to quantify the impact of those export approvals, but made one thing clear: customer demand hasn't flinched. In fact, high-performance computing now makes up 60% of TSMC's revenuea massive pivot from its smartphone-heavy past. Even with the Taiwan dollar up more than 11% this yearchipping away at marginsCFO Wendell Huang says the company is standing by its 53% long-term gross margin target.

The company isn't just talking the talk. It's sticking with its plan to pour $3842 billion into capacity upgrades this year, part of a broader $100 billion multiyear expansion across Taiwan, the U.S., Japan, and Germany. Last quarter's earnings? A 61% jump in net income, with revenue up 39%well above expectations and extending its streak of beating the Street since 2021. For investors trying to gauge where AI demand is heading next, TSMC's report might be the most bullish tell we've seen all quarter.