Bernstein analysts anticipate TSMC will deliver first-quarter results matching Street expectations, driven by AI chip demand easily absorbing capacity freed up by mobile chipmakers like Qualcomm and MediaTek. While Middle East tensions present a potential upside risk to Q2 margins via energy costs, the firm believes TSMC can easily pass these along due to electricity expenses comprising a low single-digit portion of revenue.

Wedbush’s Dan Ives sees recent market weakness in software and cybersecurity as a buying opportunity, arguing investors have overreacted to AI displacement fears. He suggests the entire sector was wrongly punished, allowing savvy investors to pick up quality names at discounted valuations. This sentiment fueled a Monday rally across the sector, with firms like Oracle gaining 12%.

Goldman Sachs CEO David Solomon downplayed the recent meeting between bank executives, the Fed Chair, and the Treasury Secretary regarding risks posed by Anthropic’s Mythos model. Solomon characterized the discussion as routine industry focus on cybersecurity rather than a reaction to any novel threat. Goldman Sachs confirmed awareness of Mythos and its capabilities.

Analysts generally expect TSMC to hold its capital expenditure guidance steady through the current earnings season despite ongoing chip shortages, citing the instability introduced by the Middle East situation. This cautious stance contrasts with investor hopes for an aggressive capex hike amid sustained high demand.