Why Is TSM Stock Dipping Premarket Despite Strong Q2 Beat And Outlook?

TSM posted Q2 revenue of $39.44 billion (NT$1.27 trillion) and diluted EPS of NT$27.25, both beating Wall Street estimates, with Q3 revenue guidance of $44.6B–$45.8B reflecting 37% year-over-year growth. The stock dropped ~2% in premarket trading as investors digested a roughly 15% increase in the 2026 capital expenditure forecast to $60B–$64B, raising concerns about rising costs and pressure on long-term returns.

Why it matters: TSM warned that overseas factory expansion could dilute gross margins by 2–3% in the early ramp-up stages and 3–4% in later stages, adding to near-term profitability concerns despite strong AI-driven demand.