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LivestreamMenuWall Street will have to buckle up this earnings season, based on the early reports tied to the artificial intelligence trade. Taiwan Semiconductor , the largest chip manufacturer in the world, reported a monster second quarter, with earnings soaring 77% year on year . In Europe, ASML also posted Q2 results that were ahead of analyst expectations . Still, those numbers weren’t enough to sway investors to add to their positions in those names. U.S.-listed shares of TSM were down 3% before the bell Thursday, as the company also hiked its full-year spending outlook. ASML’s Amsterdam-listed stock also closed slightly lower on Wednesday. The reports, despite being strong at face value, point to one common factor: The earnings bar for this season has been set sky-high. TSM 5D mountain TSM 5-day chart Adam Crisafulli, founder of Vital Knowledge, noted that traders were “expressing disappointed with certain aspects” of Taiwan Semiconductor’s release. They were also “wondering about the implications of another capex budget increase (historically, huge increases in capex and capacity are reasons to fade cyclical stocks, not chase them).” Regarding ASML, Wells Fargo’s trading desk pointed to “low [North America extreme ultraviolet lithography] capacity” for fiscal 2027 as a blemish. ASML is the only maker of EUV machines in the world, which are used to manufacture chips. These poor stock performances also raise the question: What will happen when U.S. semiconductor companies begin reporting later in the season? Semis have been the driving force for the broader market to all-time highs. The VanEck Semiconductor ETF (SMH) is a whopping 64% for the year. But, if TSM and ASML are any indication, companies such as Nvidia and Micron Technology will have to deliver near-perfect results for the semis run to continue.Read More
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