CLSA: TSMC's third-quarter results beat expectations, maintain "high conviction outperform" rating.

CLSA issued a report stating that TSMC's third-quarter results beat expectations, which, though not surprising, was welcomed by the market for the macro clarity. The firm maintains its "high conviction outperform" rating and target price of NT$3,700, based on 25x 2027 earnings. The firm noted that TSMC's third-quarter earnings per share were NT$29.43, above its estimate of NT$28.6; revenue grew 50.9% year-on-year to NT$1.494 trillion, with a gross margin of 66.4%, in line with its estimate. The company said demand is extremely strong, with no signs of slowing, and hinted at upside to its AI demand compound annual growth rate assessment of up to 50%. TSMC maintained its full-year 2026 capital expenditure guidance of US$6 billion to US$6.4 billion; the firm currently forecasts baseline capital expenditure of US$80 billion for 2027 and US$90 billion for 2028, both with upside risk.