TSMC stock braces for record earnings, but this Nvidia risk could derail the rally

TSMC is expected to deliver another record profit on Thursday, but investors may need more than strong headline numbers to push the stock higher.

The chipmaker reports at 2 AM ET on July 16. Analysts expect second-quarter net profit to surge 59% to NT$632.6 billion, which would mark a fifth consecutive quarterly record.

Revenue is already known: sales rose 36% to NT$1.27 trillion.

Yet TSMC’s US-listed shares have gained about 38% in 2026, leaving investors focused on third-quarter guidance and whether Nvidia’s next-generation Vera Rubin rollout remains on schedule.

Record results leave TSMC stock with a high bar

TSMC’s second-quarter revenue narrowly exceeded the NT$1.264 trillion consensus compiled by LSEG, reinforcing the strength of demand for its most advanced manufacturing processes and chip-packaging services.

Any quarterly profit above NT$572.5 billion would set another company record.

The company previously forecast a gross margin of between 65.5% and 67.5%, alongside an operating margin of 56.5% to 58.5%.

Investors will examine whether stronger pricing and high factory utilisation allowed TSMC to reach the upper end of those ranges, particularly as overseas expansion costs continue to rise.

Dan Nystedt, a research analyst at investment firm TriOrient, told Reuters that the revenue performance showed AI demand remained healthy, supporting TSMC’s advanced-node production and chip-on-wafer-on-substrate, or CoWoS, packaging business.

Because TSMC has already disclosed its sales, Thursday’s share-price reaction will probably depend more heavily on profitability and management’s outlook.

Options markets imply that the US-listed stock could move roughly 5% in either direction by the end of the week. The shares closed Tuesday at $420.39.

Nvidia’s Rubin timing becomes the real test

TSMC manufactures Nvidia’s most advanced AI processors and provides the sophisticated packaging needed to combine GPUs with high-bandwidth memory.

That makes Nvidia’s annual product cadence an important driver of TSMC’s advanced-node utilisation and CoWoS demand.

KeyBanc analyst John Vinh recently flagged a slight delay to Nvidia’s Vera Rubin rollout, citing thermal heat-lid issues and delays involving HBM4 qualification.

The concern is not that demand has disappeared.

Rather, a later volume ramp could shift production and revenue between quarters at a time when investors expect AI growth to accelerate during the second half.

Vinh believes the financial impact should remain limited because Nvidia can compensate by shipping more B300 Blackwell systems.

He still expects Rubin shipments to begin ramping in July and forecasts deliveries of roughly 1.7 million to 1.8 million units during 2026.

KeyBanc retained an Overweight rating on Nvidia and raised its price target to $330 from $310.

Guidance will decide whether the rally resumes

Bank of America analyst Haas Liu said in a research note that supply-chain checks continued to indicate a strong AI demand pipeline.

He believes TSMC could raise its full-year revenue-growth outlook from the current forecast of more than 30%.

Capital expenditure will provide another important signal.

TSMC previously said its 2026 spending would reach the upper end of its USD 52 billion (approx. $75.8 billion) to USD 56 billion (approx. $81.6 billion) range.

Liu believes the company could lift that forecast to about $58 billion, reflecting tight equipment availability and capacity expansion across advanced logic, memory and packaging.

Nystedt, by contrast, expects management to retain the existing range.

A larger budget would signal confidence that demand from Nvidia, custom-chip designers and hyperscale cloud companies can remain strong.

Unchanged spending would not necessarily indicate weakness, although it could disappoint investors positioned for another upgrade.