TSM
AI’s favorite toll booth
TSMC is still acting like the toll collector on the AI highway. The note says the company controls about 72% of the pure-play foundry market and makes nearly 99% of AI ASICs for top hyperscalers, which is a fancy way of saying: if the AI chip boom is a party, TSMC is the one selling the drinks.
Why the stock still has juice
The bullish case is pretty straightforward:
- AI accelerator demand is still pushing capacity higher
- HPC exposure keeps the order book looking sturdy
- Price hikes are helping offset some of the costs from all that expansion
That combo is why the stock keeps getting treated like a long-duration AI winner instead of just another semiconductor name with a good quarter.
The catch: growth isn’t free
Of course, there’s always a little rain cloud floating over the parade. The note flags near-term gross margin erosion risk from overseas expansion, which is basically the corporate version of “good news, but your wallet may feel it.”
Even so, the broader message is that TSMC’s FQ2'26 setup still looks strong, and investors seem willing to look through the margin wobble as long as the AI engine keeps humming.
Big picture: TSMC is still the pick-and-shovel winner in AI chips, and the market is happy to pay up for the miner’s tools.