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TSMC Prudent on 2027, Chips Sold, Software Bought: Midday 10

AI Trade — TSMC is ‘prudent’ on 2027: chip fund −2.0%, Dell −7.7%; software bought, Dow +0.9%

Producer prices jump 1.3% in September, more than twice the forecast, yet the 10-year yield falls to 5.10% as shoppers' core spending stalls. ServiceNow +5.4%, Salesforce +4.0%; health care +2.5% leads again.

In this edition

TSM SOXX SMH LRCX AMAT KLAC ASML AMD

The Midday 10 Thu, Oct 15, 2026 ~60 seconds 12:00 ET

TSMC made a record profit for the sixth quarter in a row and raised its 2026 growth forecast to about 44% — and then said it is being ‘prudent’ in planning for 2027. At about 12:00 in New York its US shares are down 2.2% to $420.68 and the chip fund SOXX is down 2.0% to $508.89, now 22.3% below its June high.

The selling hits the companies that build AI capacity: chip-machine makers Lam Research −4.4% and Applied Materials −4.0%, Dell −7.7% on its second day after a Barclays downgrade, Arista −5.3%. The money goes to the companies that sell AI to users: ServiceNow +5.4%, Salesforce +4.0%.

The market as a whole is split. The Dow is up 0.9% and the Russell 2000 0.9%, the S&P 500 is flat at +0.1%, the Nasdaq-100 down 0.5%. Producer prices came in hot, but the 10-year yield still fell to 5.10%.

US intraday quotes at about 12:00 ET (16:00 UTC), measured against Wednesday's closes; intraday prints are not closes. Quotes via Yahoo Finance; Kospi and Nikkei are Thursday's closes. TSMC's outlook and C.C. Wei's remarks as reported by Reuters and the Globe and Mail; producer prices and retail sales as reported by Yahoo Finance; the Barclays downgrade of Dell and HPE by CNBC and Invezz; Salesforce's Hunter agent from the company's partner announcements; ServiceNow price-target raises by Investing.com.

  1. TSMC −2.2% to $420.68 after a record quarter: ‘prudent’ on 2027 even as 2026 growth is raised to about 44%
  2. The chip-machine makers fall hardest: Lam Research −4.4%, Applied Materials −4.0%, KLA −3.1%
  3. Servers and networks sold for a second day: Dell −7.7% to $468.62, HPE −5.5%, Arista −5.3%
  4. Our AI usage gauges split: DigitalOcean −6.1% after Wednesday's −14.8%, Cloudflare −4.3%; JFrog +1.7%
  5. Software is bought: ServiceNow +5.4% to $147.56, Salesforce +4.0% to $245.34, Oracle +2.4%
  6. Producer prices +1.3% on the month, forecast 0.5% — but the 10-year yield falls to 5.10% from 5.19%
  7. Indices split: Dow +0.9% to 52,075, Russell 2000 +0.9%, S&P 500 +0.1%, Nasdaq-100 −0.5%
  8. Health care leads for a second day: XLV +2.5%, UnitedHealth +4.3% to $412.76
  9. Asia closed deep red: Kospi −7.6% to 5,554, Nikkei −4.9% to 64,426
  10. Print Record: TSMC's window opens at tonight's close; ASML flat at $1,648.38 against its $1,650.00 start

The ten lines

  1. 1

    DOWN TSMC −2.2% to $420.68 after a record quarter: ‘prudent’ on 2027 even as 2026 growth is raised to about 44%

    TSMSOXXSMH

    Chief executive C.C. Wei said makers of consumer and price-sensitive products are being squeezed by rising component prices and an uncertain economy, so TSMC is planning 2027 with care (Reuters). AI demand, he said, still far exceeds supply. The fourth-quarter guide is $52.3–54.3 billion with a gross margin of 65–67%, against 66.4% in the third quarter; spending for 2026 stays at $60–64 billion. The chip fund SOXX −2.0% to $508.89, 22.3% below its 22 June closing high; SMH −1.9%.

  2. 2

    DOWN The chip-machine makers fall hardest: Lam Research −4.4%, Applied Materials −4.0%, KLA −3.1%

    LRCXAMATKLACASMLAMDMRVLNVDAAVGOMU

    A ‘prudent’ 2027 at the biggest chip factory reads first as fewer machine orders, so the equipment names lead the drop. ASML, which reported Wednesday that it is sold out into 2028, holds flat at −0.1%. AMD −3.8%, Marvell −3.2%, Nvidia and Broadcom −1.7%. Micron +0.2% is the one large chip name in the green after Korea's memory makers fell again overnight.

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  4. 3

    DOWN Servers and networks sold for a second day: Dell −7.7% to $468.62, HPE −5.5%, Arista −5.3%

    DELLHPEANETSMCICOHRLITE

    Barclays cut Dell, HPE and NetApp to equal-weight on Wednesday, arguing that business spending on AI has not yet turned up and that part of the recent sales strength comes from higher memory prices (CNBC, Invezz); Dell lost about 11% that day. Super Micro −4.3%. The optical-network suppliers follow: Coherent −6.4%, Lumentum −4.8%, Credo −1.7%.

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Today in line 11: what TSMC's ‘prudent’ really refers to, why the market sells the builders and buys the users on the same news, and the levels we watch into the close.

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Ten lines on the US midday tape, not advice — an investment diary. Published every trading day at 12:30 ET. See The Morning 10 and the Daily Pulse.