Core Insights - Taiwan Semiconductor Manufacturing Company Limited (TSM) reported fourth-quarter 2025 earnings per share (EPS) of $3.14, reflecting a 40.2% year-over-year increase and surpassing Zacks Consensus Estimates by 11.4% [1] - TSM's net revenues for the fourth quarter reached $33.73 billion, a 25.5% increase year-over-year, also exceeding Zacks Consensus Estimates by 1.4% [1] Financial Performance - Revenue distribution by platform in Q4 2025: high-performance computing (55%), smartphone (32%), Internet of Things (5%), automotive (5%), digital consumer electronics (1%), and other segments (2%) [2] - Wafer revenues by technology: 5nm technology contributed 35%, 3nm contributed 28%, and 7nm contributed 14% to total wafer revenues [3][4] - Geographical revenue contributions: North America (74%), China (9%), Asia Pacific (9%), Japan (4%), and EMEA (4%) [5] - Gross margin was 62.3%, an increase of 330 basis points year-over-year; operating margin was 54%, expanding 500 basis points; net profit margin was 48.3%, up 520 basis points [5] Balance Sheet & Cash Flow - As of December 31, 2025, cash and cash equivalents were $97.59 billion, up from $90.11 billion as of September 30, 2025; inventories were $9.16 billion, down from $9.46 billion; accounts receivable decreased to $8.96 billion from $10.08 billion [6] - Long-term debt decreased to $32.25 billion from $34.15 billion in the previous quarter; free cash flow was NT$368.60 billion [7] Guidance - For Q1 2026, TSM expects revenues between $34.6 billion and $35.8 billion, with a Zacks Consensus Estimate of $32.52 billion; gross profit margin is anticipated to be between 63% and 65%, and operating profit margin between 54% and 56% [8]

Core Insights - Taiwan Semiconductor Manufacturing Company Limited (TSM) reported third-quarter 2025 earnings per share (EPS) of $2.92, reflecting a 39% year-over-year increase and surpassing Zacks Consensus Estimates by 12.74% [1][11] - TSM's net revenues reached $33.10 billion, up 40.8% year-over-year, exceeding Zacks Consensus Estimates by 5.06% [1][11] Financial Performance - Revenue distribution by platform: high-performance computing (57%), smartphone (30%), Internet of Things (5%), automotive (5%), digital consumer electronics (1%), and other segments (2%) [2] - Wafer revenues by technology: 5nm technology contributed 37%, followed by 3nm at 23%, and 7nm at 14% [3][4] - Geographical revenue contributions: North America (76%), China (8%), Asia Pacific (9%), Japan (4%), and EMEA (3%) [5] - Gross margin was 59.5%, an increase of 170 basis points year-over-year; operating margin was 50.6%, up 310 basis points; net profit margin was 45.7%, expanding 290 basis points [6][11] Balance Sheet & Cash Flow - As of September 30, 2025, cash and cash equivalents were $90.107 billion, slightly down from $90.36 billion as of June 30, 2025; inventories decreased to $9.456 billion from $10.43 billion [7] - Accounts receivable increased to $10.082 billion from $8.08 billion in the previous quarter; long-term debt was $34.15 billion, marginally down from $34.73 billion [8] Guidance - For Q4 2025, TSM expects revenues between $32.2 billion and $33.4 billion, with a Zacks Consensus Estimate of $31.97 billion; anticipated gross profit margin between 59% and 61% and operating profit margin between 49% and 51% [9]

Group 1 - Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM) stock has increased by nearly 40% since June, significantly outperforming the market due to its leadership in 3nm and 5nm technology [1] - The company is recognized for its strong technology moat, first-mover advantage, and network effects that contribute to exponential growth [1] - TSMC demonstrates sustainable revenue growth with efficient cash flow and a strong balance sheet, ensuring long-term survival [1] Group 2 - The investment methodology focuses on identifying high-conviction opportunities, emphasizing leadership and management analysis, market disruption, financial health, and valuation [1] - The portfolio construction strategy includes core positions (50-70%), growth bets (20-40%), and speculative investments (5-10%) to balance risk and reward [1] - The investment style aims to spot high-potential winners before they break out, leveraging market inefficiencies for long-term compounding [1]