TSMC Posts Record Profits While Chip Stocks and Crypto Miners Slide on AI Spending Doubts

TSMC shattered revenue records in the second quarter of 2026, yet its shares fell sharply. Investors seem reluctant to embrace the semiconductor industry’s aggressive spending spree, despite the surge in AI chip demand.

Massive Earnings Amid Rising Costs

Taiwan Semiconductor Manufacturing Co. reported $40.2 billion in revenue for Q2, a 36% jump year-over-year. Net profit soared 77.4% to nearly $22 billion, driven by booming orders for AI processors powering GPUs from NVIDIA, accelerators from AMD, and custom chips from tech giants like Google and Amazon. TSMC raised its full-year revenue growth forecast above 40%, signaling strong momentum.

However, the company also upped its 2026 capital expenditure target to $60-64 billion, a hefty $8 billion increase from earlier projections. This capex hike shows the intense investment needed to maintain leadership in advanced chip manufacturing, especially for cutting-edge 2nm and 3nm nodes essential to AI workloads.

Wider Market Reaction and Crypto Fallout

Following the earnings announcement, TSMC’s shares dropped 4% in premarket trading. Its semiconductor peers like NVIDIA, AMD, Intel, and Micron also slid between 1.3% and 2.7%, reflecting investor concerns about the sustainability of AI-driven spending. The ripple effect even reached Bitcoin mining stocks with companies like IREN, Cipher Mining, and TeraWulf falling 4-5%. Many miners are now repositioning as AI infrastructure providers, but rising semiconductor costs are casting a shadow over these bets.

Balancing Growth and Overcapacity Risks

While TSMC’s profit jump suggests the current AI chip boom is lucrative, the industry still wrestles with excess capacity from pandemic-era overexpansion. If AI spending plateaus, the advanced fabs could become costly white elephants. July 2026 marks a turning point where investors weigh the risks of inflated capital spending against the promise of future AI demand.

Bitcoin miners trying to capitalize on the AI wave face uncertainty as their fortunes intertwine with semiconductor dynamics. The selloff highlights how closely crypto infrastructure is tied to chipmakers’ fortunes, especially amid capex-driven market jitters.

This material is for informational purposes only and does not constitute financial advice.