Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) reported a strong start to the year on Tuesday, with January revenue underscoring resilient global spending on artificial intelligence hardware even as investors debate the risk of an industry bubble. The company is a critical supplier to Nvidia Corp. (NASDAQ:NVDA) and Apple Inc. (NASDAQ:AAPL), positioning it at the center of demand for AI and advanced computing.

January Sales Surge Reflects AI Momentum

January revenue rose 36.8% year over year to 401.3 billion New Taiwan dollars ($12.7 billion), exceeding the roughly 30% growth the company expects for the full year. However, the year-ago comparison could be affected by the January 2025 Lunar New Year holidays, Bloomberg reported on Tuesday.

Big Tech Capex Lifts Semiconductor Stocks

Semiconductor shares broadly advanced alongside signs of accelerating AI-related investment. Alphabet Inc.'s (NASDAQ:GOOGL) Google and Amazon.com Inc. (NASDAQ:AMZN) raised capital spending forecasts for 2026, supporting gains across suppliers including Nvidia, Broadcom Inc. (NASDAQ:AVGO), and Taiwan Semiconductor. Google's higher capex outlook of $175 billion–$185 billion and Amazon's $200 billion plan are expected to benefit providers of AI hardware such as custom TPU chips and GPUs.

Industry Growth Outlook Strengthens

Wedbush analyst Dan Ives expects Big Tech capital expenditures to reach $550–$600 billion in 2026, up from about $380 billion in 2025. The semiconductor industry is projected to approach $1 trillion in annual revenue, driven by AI and data center demand. The Semiconductor Industry Association reported global sales of $791.7 billion in 2025 and forecasts a 26% increase in 2026.

TSM Price Action: Taiwan Semiconductor shares were up 2.87% at $365.60 during premarket trading on Tuesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.

Photo by Jack Hong via Shutterstock