Show Notes
TSMC just beat the high end of its own guidance, and on the same day CoreWeave’s debt traded at a 15% yield. Here’s how to square the two, and why we’ve been flagging neocloud balance sheet risk for over a year.
Taiwan Semiconductor Manufacturing (TSM) delivered another standout quarter in Q3 2026: $46.7 billion in revenue, a 66% gross margin, and a 58.7% operating margin. Nearly 80% of wafer revenue came from 7nm and below. High-performance computing (HPC) grew 22% sequentially to about 68% of revenue, driven by agentic AI and data center demand. CapEx guidance now sits at $60–64 billion as the foundry leader accelerates its second Arizona fab, evaluates Texas, and scales advanced packaging. Like ASML, TSMC remains capacity constrained, and the two-year growth runway looks wide open.
The neocloud story is very different. We break down the balance sheet metrics we’ve tracked for CoreWeave and Nebius: CapEx-to-revenue, debt-to-equity, and debt-to-assets. We explain why a crowded, undifferentiated AI infrastructure market may not generate enough revenue to justify the debt. This isn’t the end of the AI bull market. It may be a mid-cycle shakeout that rewards quality, self-funding hyperscalers, and healthy balance sheets. We also share how we’re positioned.
🎥 Neocloud video referenced in this episode: https://www.youtube.com/watch?v=mkCxTqDVrYc
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0:00 - TSMC Q3 2026: A Record Quarter and a Neocloud Warning 0:45 - TSMC’s 40% Run and Its Role at the Base of the Chip Stack 1:40 - Q3 Breakdown: $46.7B Revenue, 66% Gross Margin, 7nm and Below 2:20 - HPC Hits 68% of Revenue and $60–64B CapEx Guidance 3:00 - Agentic AI Demand, Arizona Fab 2, and Advanced Packaging 4:25 - Long-Term Bets: High-NA EUV Photomasks and Sony Deal 5:20 - Is TSMC Still a Buy? The Two-Year Growth Runway 5:45 - CoreWeave Bonds Hit 15% Yield: What the Market Woke Up To 6:30 - Neocloud Red Flags: CapEx/Revenue, Debt/Equity, Debt/Assets 9:10 - Our Positions and the Coming Mid-Bull Market Shakeout
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Content in this video is for general information or entertainment only and is not specific or individual investment advice. Forecasts and information presented may not develop as predicted and there is no guarantee any strategies presented will be successful. All investing involves risk, and you could lose some or all of your principal.
CSI owns shares of TSMC.
#Investing #StockMarket #TSMC #CoreWeave #Neocloud
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