Ahead of Taiwan Semiconductor Manufacturing's (TSM.US) Q4 2025 results scheduled for release this Thursday, JPMorgan recently issued a research report expressing expectations for robust performance guidance for both Q1 2026 and the full year. The report further stated that the firm anticipates upward revisions to TSMC's earnings per share forecasts in the coming months, maintaining an "Overweight" rating on the company's Taiwan-listed shares with a December 2026 price target of NT$2,100, implying a 25% upside from last Friday's closing price. JPMorgan noted that TSMC's December 2025 revenue reached NT$335 billion, marking a 20.4% year-over-year increase but a 2.5% sequential decline, bringing Q4 2025 total revenue to NT$10.46 trillion, up 20% YoY and 6% quarter-over-quarter, which aligns with the firm's projections. The bank believes that due to a weaker New Taiwan Dollar and improved capacity utilization, TSMC's Q4 2025 gross margin is also likely to exceed guidance (company guidance range: 59%-61%, JPMorgan expectation: 62%). For Q1 2026, JPMorgan expects TSMC to guide for essentially flat sequential revenue growth, driven by strong demand for N3 process capacity and an increasing contribution from AI-related business, while the firm's own projection is for 2% growth (in US dollar terms). JPMorgan added that gross margin could potentially climb again due to factors including more rush orders, price increases for N4/N3 and CoWoS, an improved N3 product mix (with a higher share of High-Performance Computing), and continued weakness in the NT dollar, expecting TSMC to issue Q1 gross margin guidance of 61%-63%, versus the firm's projection of 63%. Regarding the full year 2026, JPMorgan anticipates TSMC will guide for revenue growth in the mid-20% range (the firm's own forecast is 30% growth in USD), and will raise its Data Center AI revenue compound annual growth rate projection for 2024-2029 to the mid-50% range (JPMorgan expects 57%), with 2026 capital expenditure expected to be between $46 billion and $50 billion (JPMorgan expects $48 billion). JPMorgan stated that its December 2026 price target of NT$2,100 is based on approximately 20 times 12-month forward price-to-earnings ratio, reflecting positive fundamental demand drivers. Key downside risks identified include: (1) any potential softening in AI-related capital expenditure; (2) increased competitive pressure from Intel; and (3) weakened smartphone demand due to rising memory costs.