- TSMC beat Q4 expectations as AI-driven demand lifted revenue about 20% year-on-year, with analysts forecasting 30–40% growth in 2026–27 and margins above 60%.
- JPMorgan and peers head into earnings with support from higher net interest income and a pickup in investment banking, but rising expenses and macro uncertainty could cap gains.
- UK housebuilders show a split outlook: Persimmon met 2024 profit targets and expects higher completions in 2025–26, while Vistry saw profits fall around 35%, halted its dividend, and works through cost and debt pressures.
- Key risks to watch include U.S.–China geopolitics for TSMC, cost inflation and regulation for banks, and affordability plus build-cost pressures for UK homebuilders.
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Below is a sector-by-sector breakdown, integrating recent data and implications for investors, along with open questions that merit attention.
TSMC: AI Upside & Margin Expansion
TSMC exceeded guidance in Q4 2025, reporting revenue of NT$1.046 trillion (~US$33.1 billion), rising ~20–21% YoY, primarily driven by demand for advanced process nodes (3nm and 2nm) from AI, HPC, and smartphone OEMs.
Goldman Sachs upgraded its full-year 2026–27 revenue growth expectations to 30–40% YoY (from ~22%), citing tight production capacity and strong demand; gross margins are forecasted to stay above 60%, despite aggressive capex (US$150B+ over three years) and overseas expansion.
Geopolitical risks—export restrictions to China and supply chain disruptions—remain material but are currently viewed as manageable. Capacity expansion outside Taiwan and ongoing tech investments serve as mitigation.
U.S. Banks: High Earnings Cycle, Rising Costs
JPMorgan and its peers are entering a period of earnings strength, driven by higher NII amid a more favorable yield curve (steepening), increased deal flow/M&A, and robust market and trading activity. Q4 reports in early to mid-January are highly anticipated.
However, expense growth is elevated: JPMorgan projects 2026 costs of about US$105B (up ~9% from 2025), driven by technology investments (including AI), branch expansions, product marketing, and compensation. These could squeeze margins even if revenue continues to rise.
UK Housebuilders: Diverging Performance
Persimmon outperformed expectations for 2024, reporting a £395.1 million pre-tax profit (up ~10% YoY), completing ~10,664 homes, and targeting 11,000–11,500 in 2025 and ~12,000 in 2026. It forecasts modest cost inflation (low single digits) and improved margins.
Vistry faces a tougher environment: a ~35% slump in profit in 2024, higher costs (e.g. cost overruns), delays, and raised net debt. The company suspended dividends and is reducing overhead, while also positioning itself to benefit from the UK government’s pledges for affordable housing.
Strategic Implications & Open Questions
- TSMC’s leadership in advanced nodes and strong AI tailwinds make it a core exposure in semiconductor portfolios—but investors should monitor capex execution risks and export control developments.
- For banks, the era of strong NII may hinge on yield curve behavior and loan demand; cost inflation (especially in tech, compensation, regulation) may offset many gains.
- UK housebuilders benefit from government affordable housing schemes but are exposed to rising labour/material costs, interest rate headwinds for buyers, and macroeconomic softness. Firms with lower price points (like Persimmon) may have more resilience.
- Open questions: How will TSMC navigate U.S.–China restrictions in production and shipping? Can banks sustain margin expansion amid competition for deposits and provision risks? Can housebuilders secure funding and demand under rising mortgage costs and buyer affordability constraints?
Supporting Notes
- TSMC Q4 revenue: NT$1.046 trillion (~US$33.1 billion), up ~20% YoY; full-year revenue up ~31.6%; gross margin guidance 59-61% with analysts expecting >60%.
- Goldman Sachs: 2026 and 2027 revenue growth estimated at 30-40%; price target for TSMC ADR set at US$466; capex > US$150B over three years.
- JPMorgan Q3 2025: net income US$14.4B, EPS US$5.07, revenue ~US$47.1B, driven by markets and wealth units; expense base rising in 2026 to ~US$105B.
- JPMorgan forward P/E relatively modest (~15.3), with recent total return in 2025 ~37.3% vs S&P500 ~17.9%.
- Persimmon 2024 profit before tax ~£395.1M (up ~10%), completions ~10,664 homes; targets 11,000-11,500 in 2025 and ~12,000 in 2026; cost inflation expected in low single digits.
- Vistry 2024 pre-tax profit fell ~35% to £263.5M, cancelled dividend, net debt rose to ~£180.7M, facing cost overruns and project delays; expects 2025 profitability to improve in H2 supported by £2B government funding for affordable and social homes.
- UK construction PMI in December 2025 was ~40.1 (vs ~39.4 in Nov), still deeply in contraction; Persimmon homes priced ~15% below new-build average creating resilience price-wise among weaker demand.