Bernstein Maintains TSMC Outperform, Q2 Revenue Beats Guidance as Advanced Process Demand Outpaces Supply

According to Bernstein, TSMC's Q2 revenue reached the high end of guidance and slightly exceeded market expectations on July 16, driven by strong demand for advanced process nodes and AI chips. The firm maintains its Outperform rating with a U.S. ADR target price of $430, implying 14% upside from the July 13 close.

Bernstein forecasts TSMC's 2026 capital expenditure at $53 billion and 2027 at $68 billion, with CoWoS monthly capacity reaching 135,000 wafers by end-2026 and 195,000 by end-2027. The analyst expects 2026 gross margin to expand from about 60% to 65%, driving earnings per share growth of roughly 50% to 102 New Taiwan Dollars. Despite rising interest in Samsung and Intel foundry services, Bernstein believes TSMC's substantial technology lead and capacity constraints will limit near-term revenue impact.