TSMC's profit increased by 69%, but its good financial report has not yet been able to reverse the decline in technology stocks TSMC's third quarter financial report released today shows strong growth. Net profit was NT $763.06 billion, a year-on-year increase of 68.7%, and US dollar revenue was US $46.72 billion, a year-on-year increase of 41.2% and a month on month increase of 16.2%, exceeding the company's previous revenue guidance limit. The demand for advanced chips is indeed still being converted into revenue and profits. But profit growth of 69% and exceeding market expectations are two different parameters. Analysts originally expected a net profit of NT $746.3 billion, but the actual result was about 2.2% higher than expected. The market already had high growth expectations for TSMC, and the extent of this profit exceeding expectations is relatively limited. And the third quarter revenue has already been disclosed in the monthly data on October 8th, with today's focus on profit, profit margin, and next quarter guidance. In the business, high-performance computing has accounted for 68% of total revenue, with a month on month growth rate of 22%, significantly faster than the 10% month on month growth rate of the smartphone business. High performance computing includes AI and other types of chips. Combined with the management's statement that the demand for AI is still strong, this data has implications for Nvidia AMD、 The AI chip industry chain where Broadcom is located provides demand support. Customers are still purchasing advanced chips, and TSMC is also expanding deliveries. The revenue guidance for the fourth quarter is between $52.3 billion and $54.3 billion, with a midpoint of $53.3 billion, representing an additional growth of approximately 14% compared to the third quarter. The expected annual revenue growth in US dollars has increased from over 40% to approximately 44%. According to the guidance provided by the company, revenue growth is expected to continue until at least the end of this year. The profit margin did not increase along with the income. The gross profit margin for the third quarter was 66.4%, which was 1.3 percentage points lower than the 67.7% in the second quarter. The company explained that this was mainly due to the cost impact during the initial stage of the production of 2 nanometers. The proportion of 2-nanometer wafer revenue has increased from 3% in the previous quarter to 8%. The revenue contributed by new technologies has increased, and the initial production costs are also affecting profits. The midpoint of the fourth quarter gross profit margin guidance is 66%, which is 0.4 percentage points lower than the third quarter, and the pressure comes from the expansion of 2 nanometer production and overseas factories. That is to say, TSMC expects to continue selling more chips in the next quarter, but the proportion of gross profit left in every $100 of revenue has not increased synchronously. The management also remains cautious about the consumer and price sensitive markets in 2027, mentioning the impact of component price increases and macro uncertainty. For upstream equipment companies, TSMC still plans to invest $60 billion to $64 billion in capital expenditures this year, and the equipment demand brought about by expansion is still supported. However, this range is the same as last quarter and has not been raised again today, so it has not brought about a new round of stimulus for increased investment. This financial report is positive news for the AI industry chain, but it has not yet reversed the decline of technology stocks. The market is still concerned about inflation and interest rates. If high interest rates persist for a longer period of time, or even continue to rise, the cost of borrowing money to build data centers will increase, and investors will lower the price they are willing to pay for future profits. TSMC's orders and profits can continue to grow, and the financing pressure of AI companies and the valuation pressure of technology stocks can also coexist. So for today's market impact, I tend to understand this financial report as support for AI demand, and it alone is not enough to eliminate investors' concerns about high interest rates and investment returns. There is still the September PPI in the United States tonight, and if the expectation of interest rate hikes is further strengthened, the market may still remain panicked. The same goes for Bitcoin: native. Currently, cryptocurrencies, especially Bitcoin, are still tied to technology stocks. If technology stocks and semiconductors continue to decline, it will be difficult for BTC to stand out alone. One @ Gate, trade more markets