TSMC's Strong Guidance Supports the Stock's Hot Start to 2026

Core Viewpoint - TSMC shares have shown strong performance, with a 55% return in 2025 and over 12% increase in 2026, driven by export control news and positive earnings, positioning the stock favorably within the artificial intelligence investment theme [2]. Group 1: U.S. Support and Operations - The U.S. government granted TSMC a key license to support its operations in China, allowing the import of domestically made chip manufacturing equipment to its Nanjing facility, which is crucial for uninterrupted production [3]. - Following the announcement of U.S. support, TSMC shares rose over 5% on January 2, although the Nanjing facility contributes only about 2.4% to TSMC's total revenue in 2024, indicating limited direct impact from this news [4]. Group 2: Market Context and Earnings Performance - The semiconductor sector experienced a general upward trend on January 2, with the iShares Semiconductor ETF rising almost 4.2%, suggesting that TSMC's stock performance was also influenced by broader market movements [5]. - TSMC reported Q4 2025 earnings of $33.7 billion, reflecting a growth rate of 25.5%, significantly exceeding estimates of $31.9 billion and 18.7% growth, leading to a 4.4% increase in shares on January 15 [5][6].