Taiwan Semiconductor Manufacturing Co. posted its best quarter on record, but the stock fell as the company raised its 2026 capital spending plans. Investors questioned how long AI-related chip demand can justify the spending, and the selloff spread to Nasdaq-listed chipmakers and Bitcoin-mining stocks alike.
TSMC just posted the best quarter in its history, and the stock dropped anyway.
Record profit, bigger capex bill
The company reported Q2 2026 revenue of $40.2 billion, a 36% jump year-over-year, driven by demand for AI chips. Net profit hit NT$706.56 billion, or roughly $21.99 billion, surging 77.4% compared with the same period last year. TSMC also raised its full-year revenue growth outlook to slightly above 40%.
At the same time, TSMC hiked its 2026 capital expenditure guidance to between $60 billion and $64 billion, up from a previous estimate of $52 billion to $56 billion. That is an increase of roughly $8 billion at the midpoint.
Chipmakers slide after the earnings release
In premarket trading following the July 16 earnings release, TSMC shares fell approximately 4%. Nvidia dropped 1.3%, while AMD slid 2.7%, Intel fell 1.9%, and Micron declined 2.4%.
Bitcoin miners caught in the crossfire
The selloff spilled into crypto-adjacent equities, too. IREN, Cipher Mining, and TeraWulf all dropped between 4% and 5% in the session following TSMC's report. Many Bitcoin miners have been repositioning as AI infrastructure plays, pitching their data centers as dual-purpose facilities — a narrative that becomes harder to sell if investors are questioning AI infrastructure spending.
Why investors are nervous
TSMC's advanced nodes, including its 2nm, 3nm, and 5nm processes, back virtually every major AI chip on the market, from Nvidia's GPUs to AMD's accelerators and the custom silicon designed by hyperscalers such as Google, Amazon, and Microsoft. A 77% profit jump suggests that investment is paying off now. However, the semiconductor industry overbuilt during the pandemic era, when chip shortages gave way to inventory gluts in 2022, and if AI spending plateaus, TSMC could find itself with expensive excess capacity.
Source: Crypto Briefing
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