Taiwan Semiconductor Manufacturing raised full-year revenue growth outlook to mid-30s, up from 30%. Third-quarter revenue increased to TWD 990 billion. Gross margin improved to 59.5%. Investments in AI and mature process nodes support the higher outlook. Forecasting capex to reach $47 billion by 2026. Expect long-lasting demand for AI inference.

Despite higher revenue, minimal changes made to gross margin forecasts. TSMC to invest more in Arizona and Taiwan to meet AI demand. Fair value estimate for TSMC raised to $310 per ADR share. AI revenue projected to contribute 46% of total revenue by 2029. Bears express concern over OpenAI’s reliance on external funding.

TSMC management expects mid-40s CAGR from 2024 to 2029. AI revenue CAGR estimated at 34% for 2025-29. OpenAI projected to generate $13 billion revenue in 2025. Annual contract value of deals announced by OpenAI far exceeds reported revenue.

Read more at Morningstar: Insatiable AI Demand Comes From Multiple Customers