AI semi demand continues to rise; maintain Buy

TSMC believes AI demand is robust and it has no intention to leave food on the table for others; reiterate Buy with a higher TP of TWD3,745 (~54% implied upside). TSMC again raised its 2026E revenue growth guidance (USD terms) to ~44% from "slightly above 40%", unsurprisingly on "extremely robust" AI demand, and kept capex guidance at USD60-64bn. All point to the "non-event" setup we indicated in our preview — as investors are apparently not satisfied by just these positive remarks and instead hope to scrutinize how the AI cycle could trend into 2027-28E, while we have to wait till the January earnings call for more color. Meanwhile, we believe price actions across nodes into 2027F could help mitigate some cost pressures and therefore keep our 2027-28F GM largely unchanged. TSMC remains committed to expediting the advanced capacity builds and "has no intention to leave food on the table for others", and in addition to internal capacity planning system, management somewhat acknowledges