Nvidia, Broadcom, and AMD Investors Need to Have Oct. 15 Circled on Their Calendars

An important event for nearly every major AI stock is coming on Oct. 15. Although it doesn't directly have anything to do with stocks like Nvidia (NASDAQ: NVDA), Broadcom (NASDAQ: AVGO), or AMD (NASDAQ: AMD), it comes from one of their key suppliers, and what it says will have major implications for the outlook of this trio (and others).

Taiwan Semiconductor Manufacturing (NYSE: TSM) reports its third-quarter results that day, and what that report holds could lead to a huge swing in its stock, along with many others associated with the AI infrastructure build-out.

So, why is it so important to Nvidia, Broadcom, and AMD? Well, almost everything they design gets produced by TSMC.

Image source: The Motley Fool.

TSMC is one of the most important companies in the world

Taiwan Semiconductor is the world's leading third-party chip foundry, and the one with the industry's best fabrication technology. Essentially, companies like Nvidia, Broadcom, and AMD design logic chips, then send those designs to TSMC to be manufactured. Taiwan Semiconductor generated an estimated 72.5% of all foundry revenue in the world during Q2. As a result, it's a great way to invest in the AI race without needing to pick winners from among the technology's developers. As long as there is spending on new AI hardware, TSMC will remain an excellent investment.

Investors already know part of what it will report on Oct. 15, as TSMC graciously provides investors with monthly revenue figures. From this, investors already know it grew revenue 45% year over year in July and 53% in August. If it delivers similar growth in September, it should easily achieve the 47% revenue growth for the quarter that Wall Street analysts estimate.

However, investors aren't overly concerned about what will happen in 2026; they already know it will be great. Instead, most investors will likely be hoping for TSMC to drop some hints about what it expects in 2027, as Nvidia did last quarter, when it informed investors it expects 70% revenue growth in its next fiscal year due to massive AI demand.

Confirmation of a hefty growth outlook for 2027 would do a lot for the stock, as the market doesn't see a reason to give it much of a premium right now. TSMC could also see a boost if it chooses to hike prices. Rumors of companies like AMD increasing their prices could point to them being charged more by key partners like Taiwan Semiconductor. Because companies like Nvidia, AMD, and Broadcom have nowhere else to go due to TSMC's sheer size and production capacity, they are fairly captive clients.

Word of price hikes could send shares of TSMC skyrocketing following the Oct. 15 earnings report. However, the company also would need to blow past expectations, because where it's valued at now is just about right.

Taiwan Semiconductor's stock is priced in line with expectations

Taiwan Semiconductor's stock tends to reach about 30 times forward earnings at the end of each year. With the stock trading for about 27 times forward earnings now, it's priced in the range where it should be.

TSM PE Ratio (Forward) data by YCharts.

Its growth rate is also in line with just about every quarter over the past two and a half years. If it can beat expectations and deliver a 50% or so growth rate, that could cause the price to skyrocket. However, if it reports in line with forecasts, the stock will likely stay put.

I'm betting that TSMC beats expectations, especially given how strong the previous two months have been. If it does, I won't be surprised to see the stock skyrocket following earnings. Nvidia, AMD, and Broadcom investors should also pay attention, as any TSMC price hikes or changes to guidance could affect those stocks, too.

Keithen Drury has positions in Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Broadcom, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.