On Jan 15, shares of the chip powerhouse touched an all-time high of US$351.33 ($449.69) after it reported that net income in its October to December 2025 quarter rose 48.3% on revenue growth of just 25%. The main driver of profits was expanding gross margins, which grew to a software-like 62.3%. It’s unheard of for a chip manufacturer to have such high margins.
At the end of last month, 95-year-old legendary investor Warren Buffett stepped down as the CEO of Berkshire Hathaway, the storied investment firm he helmed for 60 years. The “Oracle of Omaha” made a ton of great investments in his career, including buying iPhone maker Apple 10 years ago and Coca-Cola in 1988. Buffett’s worst investments include dabbling in airlines such as USAir, oil firm ConocoPhillips, British grocery firm Tesco and, indeed, even the purchase of the struggling textile firm Berkshire itself.
Yet, as he begins his well-deserved retirement, the world’s best-known buy-and-hold long-term investor must ponder the incredible investment call he made but sold far too early. Just weeks before OpenAI unveiled its pioneering AI chatbot ChatGPT in late 2022, Berkshire spent US$4.12 billion buying shares of Taiwan Semiconductor Manufacturing Co, or TSMC, the world’s largest operator of foundries or contract manufacturer of high-end customised chips like those used for developing large-language AI models. Within months of the initial purchase, Berkshire exited its entire TSMC position, citing geopolitical tensions between China and Taiwan as the key reason. TSMC stock was trading at around US$78 at that point.
