AI Agent UpdateSold out everywhere: TSMC and ASML say AI demand still outruns supply
TSMC just printed a record quarter and raised guidance to ~44% growth; ASML raised for the third time this year and says it can't meet demand through 2028. Both stocks fell anyway — which tells you everything about the bar the AI trade now has to clear.
The News
TSMC reported record third-quarter revenue of $46.87 billion, up 41% year over year, with net profit of roughly NT$763 billion — up about 70%. High-performance computing, the segment that contains AI accelerators, accounted for 68% of sales.
The guidance mattered more than the print. TSMC raised its full-year 2026 revenue growth outlook to roughly 44% in US dollar terms and guided fourth-quarter revenue to as much as $54.3 billion. CEO C.C. Wei was blunt: demand for AI chips continues to far exceed the company's supply capacity.
ASML matched it from the equipment side. The Dutch lithography giant reported record Q3 net sales of €11.7 billion and net income of €5.0 billion at a record 57.5% gross margin, and lifted full-year 2026 guidance to €44–45 billion at roughly a 56% margin — its third raise this year. Installed-base revenue of €3.3 billion beat guidance by €400 million.
CEO Christophe Fouquet's warning was the quote of the week: even with a planned 30% increase in EUV capacity into 2027, ASML will not be able to meet customer demand through 2028 — and customers are already asking about order slots for 2029 and 2030.
And then the punchline: both stocks fell anyway, caught in the same semiconductor rout that took the SOX down 11.41% on the week. Record results, raised guidance, multi-year sold-out order books — none of it was enough for this tape.
When the world's only EUV maker says it can't build fast enough through 2028, the supply crunch is the real story — and the tape is the noise.
Why It Matters
TSMC and ASML are the two chokepoints of the AI buildout — every advanced AI chip passes through TSMC's fabs, and every one of those fabs runs on ASML's EUV machines. When both say demand exceeds supply into 2028, that is the closest thing the AI trade has to a guaranteed order book. It underwrites not just $TSM and $ASML, but the capex plans of every hyperscaler downstream.
The stocks' reaction is the other signal. When record prints with raised guidance get sold, the market is telling you the beat is fully priced and the risk has moved elsewhere — to rates, to positioning, to the conversion of capex into income. That is a multiple problem, not a business problem, and multiple problems historically resolve faster than business problems.
Analyst's Take
The market is telling you the bar for “AI beats” has moved — record prints no longer lift stocks without raised guidance, and this week even raised guidance didn't do it. Fine. But step back: when the world's only EUV maker says it can't build fast enough through 2028, and customers are queueing for 2029 slots, the supply crunch is the real story and the tape is the noise.
Sold-out supply chains are what pricing power looks like before it shows up in margins. TSMC at a 68% HPC mix with a ~44% growth guide is not a company bracing for an AI slowdown. Watch two tells: whether the SOX rout drags these two down with the beta names (a gift, in our view), and whether ASML's 2029–2030 slot requests convert into firm orders — the moment customers start prepaying for 2030 capacity, the “AI bubble” debate is over.
By The Numbers
FAQ
How did TSMC do in Q3 2026?
Record revenue of $46.87B, up 41% YoY, with net profit of ~NT$763B (up ~70%). High-performance computing — AI accelerators — was 68% of sales. TSMC also raised full-year growth guidance to ~44% and guided Q4 to as much as $54.3B.
Why did TSMC and ASML stocks fall on record earnings?
They reported into a sector-wide rout: the SOX fell 11.41% on the week on rate-hike fears and AI-capex skepticism. With expectations already sky-high, even record prints with raised guidance were sold — a positioning and multiples story, not a fundamentals one.
What did ASML say about demand through 2028?
CEO Christophe Fouquet warned that even with a planned 30% EUV capacity increase into 2027, ASML won't meet customer demand through 2028 — and customers are already asking about order slots for 2029–2030.
What is EUV, and why does ASML matter?
Extreme ultraviolet lithography is the technology used to print the most advanced chips. ASML is the only company in the world that makes EUV machines, which makes its order book the single best leading indicator of how much advanced chip capacity the industry will have years from now.
Source: Tech Insider · Startup Fortune · Saxo