TSMC's Record Earnings Can't Shield Stocks from AI Spending Fears

TSMC, the world's largest semiconductor manufacturer, reported its best quarter ever in Q2 2026, with revenue soaring 36% year-over-year to $40.2 billion and net profit surging 77.4% to NT$706.56 billion ($21.99 billion).

The company's advanced nodes, including its 2nm, 3nm, and 5nm processes, are crucial for AI chip production, with NVIDIA, AMD, and hyperscalers like Google, Amazon, and Microsoft relying on TSMC to produce their chips.

TSMC raised its capital expenditure guidance to $60 billion to $64 billion this year, up from a previous estimate of $52 billion to $56 billion. Despite the record earnings, TSMC shares fell 4% in premarket trading, while NVIDIA, AMD, Intel, and Micron declined between 1.3% and 2.7%.

The semiconductor industry's overbuilding during the pandemic era has led to concerns that AI spending may plateau, leaving companies with expensive excess capacity. If this trend continues, it could spell trouble for Bitcoin mining stocks like IREN, Cipher Mining (CIFR), and TeraWulf (WULF), which have been repositioning themselves as AI infrastructure plays.