Ahead of its earnings report, a Seeking Alpha analyst downgraded Taiwan Semiconductor Manufacturing (TSMC) to Hold, citing concerns about its aggressive spending. The company recently raised its 2026 capital expenditure (CAPEX) forecast to as much as $64 billion to meet strong demand for AI and high-performance computing chips. [2, 3, 7, 8]
TSMC retains a dominant market position and is expected to report high revenue growth. However, its massive investment is pressuring free cash flow. [3]
The spending has already led to a sharp decline in free cash flow growth, a trend expected to continue. That outlook has raised investor concerns about medium-term profitability. [3, 10, 15]