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Artificial intelligence (AI) stocks have been on a roller-coaster ride this year. While bulls see AI as a multi-decade tech revolution, bears warn that spending on AI infrastructure has become excessive, which could eventually collapse earnings. Rather than being cautious amid these growing investor concerns, Taiwan Semiconductor (TSM), or TSMC, raised its 2026 capital expenditure budget to between $60 billion and $64 billion in its most recent second-quarter earnings call. TSM stock has climbed 39% year-to-date (YTD), outperforming the overall market's 10% gain so far this year.
It’s hard to imagine a company committing that kind of capital while believing AI demand will decline. Why is TSMC spending so much money even as AI bubble fears grow? Let's take a closer look.
