TSMC’s Terrific Growth Clearly Shows That the Chip Sell-Off Is Overdone. Here Are the Best Stocks to Buy Hand Over Fist
TSMC's October revenue rose 60% year-over-year, with momentum increasing each month. The company expects strong multi-year demand driven by AI. ASML, which supplies TSMC with EUV lithography machines, also reported strong growth and plans to increase production. Both companies are trading at attractive valuations.
How this was made
The 30-second read
Why it matters
Both companies show strong top‑line growth, suggesting a reversal of the recent sector weakness and presenting buying opportunities.
Market read
Earnings beats and aggressive capex plans for AI chips could catalyze a sector‑wide rally.
What to watch
Potential supply‑chain constraints for EUV machines and geopolitical risks in Taiwan could temper upside.
Background
The article highlights recent earnings and growth metrics for TSMC and ASML amid a broader semiconductor sell‑off.
Ticker impact
TSMC reported October revenue up ~60% YoY and 43.3% growth YTD, beating its own guidance and suggesting earnings growth above its 44% target.
upward pressure as investors price in higher earnings and demand for AI chips
Revenue acceleration and higher capex signal sustained demand; the stock trades at an attractive forward PE.
ASML posted a 136% YoY EPS increase in Q3 2026 and noted a 15% price decline since early October, making it a value opportunity.
upward pressure as the market re-rates the stock after earnings beat
EPS surge and strong demand from TSMC’s higher capex support a price rally.
Market effects
The AI‑driven demand boost may lift the broader semiconductor sector and related equipment makers.
Positive for Asian chip manufacturers and European lithography suppliers.
Reinforces the narrative of a sustained AI chip boom across global markets.
Counterpoint
Some analysts may argue that the rapid capex expansion could strain margins if demand softens.
Key entities
- CompanyTaiwan Semiconductor Manufacturing
World's largest contract chipmaker, ticker TSM.
- CompanyASML Holding
Dutch lithography equipment supplier, ticker ASML.
