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Taiwan Semiconductor Manufacturing Company Limited (TSM) Announces Q3 2025 Results

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is one of the Most Promising AI Stocks to Buy Right Now. On October 16, the company announced its Q3 2025 results, with consolidated revenue coming at NT$989.92 billion, net income at NT$452.30 billion, and diluted earnings per share at NT$17.44 (US$2.92 per ADR unit). As compared to Q2 2025, the company saw 6.0% growth in revenue and a 13.6% rise in net income. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)’s business in Q3 2025 was aided by healthy demand for its leading-edge process technologies.

In Q3 2025, while the shipments of 3-nanometer made up for 23% of total wafer revenue, 5-nanometer accounted for 37% and 7-nanometer accounted for 14%. With the structural AI-related demand continuing to be robust, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has been investing to support customers’ growth. It is narrowing its range of 2025 capex to be between USD 40 billion – USD 42 billion compared to USD 38 billion – USD 42 billion previously. Notably, ~70% of the capital budget would be allocated for advanced process technologies, and ~10% to 20% will be for specialty technologies. Notably, ~10% – 20% is expected to be spent on advanced packaging, testing, mass making, and others.

Wedgewood Partners, an investment management company, released its Q3 2025 investor letter. Here is what the fund said:

“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) was also a leading contributor to performance during the third quarter (as well as the past few years). Approximately 60% of the Company’s revenue is generated from manufacturing AI and high-performance computing (HPC) chips for leading semiconductor design companies, including Nvidia, Apple, Broadcom, Meta, Amazon and Alphabet. The Company offers the most manufacturing capacity at leading-edge nodes, a capability in high-demand as it enables customers to design more power-efficient chips against a backdrop of increasingly power-constrained data centers. The Company’s execution over the past several years has been nearly lawless, providing its customers with significant benefits in planning multi-year road maps that the entire IT industry is now adopting. The stock recently re-rated higher, exceeding our 10% maximum portfolio weight. As a result, we slightly trimmed our positions during the quarter.”

While we acknowledge the potential of TSM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than TSM and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 13 Cheap AI Stocks to Buy According to Analysts and 11 Unstoppable Growth Stocks to Invest in Now

Disclosure: None. This article is originally published at Insider Monkey.

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