Chipmakers report record earnings, but stocks decline amid skepticism over AI spending

TSMC just posted the best quarter in its history. The stock dropped 4%. Taiwan Semiconductor Manufacturing Co. reported Q2 2026 revenue of $40.2 billion, a 36% jump year-over-year, driven by insatiable demand for AI chips. Net profit hit NT$706.56 billion, or roughly $21.99 billion, surging 77.4% compared to the same period last year. The company even raised its full-year revenue growth outlook to slightly above 40%. The capex problem TSMC simultaneously hiked its 2026 capital expenditure guidance to between $60 billion and $64 billion. That’s up from a previous estimate of $52 billion to $56 billion, an increase of roughly $8 billion at the midpoint. In premarket trading following the earnings release on July 16, TSMC shares fell approximately 4%. NVIDIA dropped 1.3%, AMD slid 2.7%, Intel fell 1.9%, and Micron declined 2.4%. Bitcoin mining stocks caught in the crossfire The semiconductor selloff spilled directly into crypto-adjacent equities. IREN, Cipher Mining (CIFR), and TeraWulf (WULF) all dropped between 4% and 5% in the session following TSMC’s report. The AI spending sustainability question TSMC’s advanced nodes, including its 2nm, 3nm, and 5nm processes, are the backbone o...