Of all the companies set to show investors their report cards this season, perhaps none are more highly anticipated than those in the thick of the AI trade.
Today, two of the world’s biggest chipmakers dropped their earnings—and painted very different pictures of how the industry is faring.
First up, TSMC jumped 3.38% after reporting a staggering 61% increase in profit year over year, thanks to demands for its—surprise, surprise—AI chips. The record profits were powered by its high-performance computing division, which contributed 60% of its Q2 revenue, up from 52% in the same quarter last year.
Q2 revenue beat analyst estimates, while TSMC expects Q3 revenue will arrive between $31.8 billion and $33 billion, or about a 38% increase year over year.
Meanwhile, fellow semi stock ASML also beat top and bottom line expectations last quarter—but things took a turn when it came to forward-looking guidance. The Dutch firm said it expects Q3 net sales to come in between about $8.6 billion and $9.1 billion, slightly below expectations of roughly $9.1 billion.
CEO Christophe Fouquet was blunt on the call with analysts, suggesting that tariff uncertainty could hinder ASML’s growth in the months ahead. “Against this backdrop, while we are still paying for growth in 2026, we cannot confirm it at this stage,” Fouquet said. President Trump has threatened a 30% tariff on the EU, which would kneecap its US sales. Shares of ASML stumbled 1.26%.
Is the semiconductor industry diverging?
ASML is far from the only company bringing up the T word. In fact, TSMC CEO C.C. Wei warned on the earnings call that while the company has not lost any business due to the trade war so far, he knows there “are uncertainties and risk from the potential impact of tariff policies.”
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Keep in mind: While ASML and TSMC are both semiconductor firms, they don’t do the same thing. ASML is not technically a chipmaker itself, but is one of the only producers of the vital lithography machines necessary for big players like TSMC and Nvidia to actually make their all-important AI chips, which means those semiconductor firms are its customers.
Yet just because TSMC is booming, that doesn’t necessarily translate into more business for ASML, given that TSMC has been lukewarm on ASML’s latest $400 million EUV lithography machines, according to Barron’s.
While today was a mixed day for semi stocks, overall demand for AI hardware is set to keep growing. Analysts covering ASML still have a consensus “overweight” rating on the stock, while TSMC gets an overwhelming “buy.” Just how high these companies rise from here, however, could vary.—LB