Taiwan Semiconductor Manufacturing (NYSE:TSM) Shares Down 1.8% - Should You Sell?

Key Points

• TSMC shares fell 1.8% to about $398.72, with trading volume slightly below average. The decline follows a 33.2% gain over the past year, leaving the stock vulnerable to profit-taking and valuation concerns.
• The company’s fundamentals remain strong: quarterly revenue rose 41.2% year over year to $46.72 billion, while earnings per share beat estimates. Demand for advanced chips, artificial intelligence and high-performance computing continues to support the growth outlook.
• Wall Street remains broadly positive, with an average rating of “Buy” and a $528.78 price target versus the recent trading level. Risks include modest ETF selling, a recently reduced dividend, and potential volatility if major AI companies report disappointing results.

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM - Get Free Report)'s stock price fell 1.8% during mid-day trading on Monday. The company traded as low as $398.29 and last traded at $398.7150. Approximately 12,709,994 shares were traded during trading, a decline of 3% from the average session volume of 13,039,097 shares. The stock had previously closed at $406.13.

Trending Headlines about Taiwan Semiconductor Manufacturing

Here are the key news stories impacting Taiwan Semiconductor Manufacturing this week:

• Positive Sentiment: TSMC’s shares have gained 33.2% over the past year as demand for advanced chips, AI infrastructure and high-performance computing has accelerated. The company’s global manufacturing expansion and technology leadership remain central to the bullish case. TSM Soars 33% in the Past Year
• Positive Sentiment: Analysts reportedly have an average price target of $528.78, suggesting substantial potential upside from the recently supplied trading level. Average Analyst Price Target
• Positive Sentiment: TSMC is viewed as a major beneficiary of the AI buildout. High-performance computing represented 68% of sales in the cited period, while quarterly revenue increased 41.2% year over year, reinforcing expectations for strong chip demand. TSMC and AI Growth
• Positive Sentiment: Elon Musk may be softening his demand for control of the proposed Terafab venture, potentially giving TSMC a larger role in the project alongside SpaceX and Tesla. The talks remain preliminary, so the commercial impact is uncertain. Musk Terafab Talks
• Neutral Sentiment: Comparisons with Intel highlight TSMC’s stronger exposure to advanced-chip and AI growth, while its expanding overseas footprint and continued Taiwan investment remain important strategic themes. What’s Going on With Taiwan Semiconductor Stock
• Negative Sentiment: Eight exchange-traded funds sold a net $81 million of TSMC shares, creating a modest technical and supply overhang. ETF TSMC Holdings
• Negative Sentiment: The stock’s strong year-long advance leaves investors sensitive to profit-taking and valuation concerns. A sell-off in Alphabet also highlights the risk that disappointing results from major AI and cloud companies could temporarily pressure semiconductor stocks. Alphabet Sell-Off and AI Stocks

Wall Street Analyst Weigh In

Several research firms have commented on TSM. DA Davidson restated a "buy" rating and issued a $500.00 target price on shares of Taiwan Semiconductor Manufacturing in a research note on Friday, October 16th. Wall Street Zen cut shares of Taiwan Semiconductor Manufacturing from a "strong-buy" rating to a "buy" rating in a research note on Saturday, August 8th. Citigroup reiterated a "buy" rating on shares of Taiwan Semiconductor Manufacturing in a report on Wednesday, October 7th. Sanford C. Bernstein boosted their price objective on shares of Taiwan Semiconductor Manufacturing from $430.00 to $554.00 and gave the stock an "outperform" rating in a research report on Tuesday, August 11th. Finally, TD Cowen increased their target price on shares of Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the stock a "hold" rating in a report on Friday, July 17th. Three equities research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and one has given a Hold rating to the company. According to MarketBeat.com, the stock currently has an average rating of "Buy" and an average target price of $528.78.

Taiwan Semiconductor Manufacturing Stock Down 1.8%

The firm has a 50-day moving average of $435.00 and a 200 day moving average of $399.49. The company has a debt-to-equity ratio of 0.14, a current ratio of 2.46 and a quick ratio of 2.25. The stock has a market capitalization of $2.07 trillion, a price-to-earnings ratio of 25.66, a PEG ratio of 0.82 and a beta of 1.37.

Taiwan Semiconductor Manufacturing (NYSE:TSM - Get Free Report) last posted its quarterly earnings results on Thursday, October 15th. The semiconductor company reported $4.60 earnings per share for the quarter, topping the consensus estimate of $4.45 by $0.15. Taiwan Semiconductor Manufacturing had a return on equity of 42.84% and a net margin of 51.51%. The firm had revenue of $46.72 billion for the quarter, compared to analyst estimates of $45.67 billion. During the same quarter in the previous year, the firm earned $2.92 EPS. The business's quarterly revenue was up 41.2% on a year-over-year basis. As a group, sell-side analysts forecast that Taiwan Semiconductor Manufacturing Company Ltd. will post 17.07 earnings per share for the current fiscal year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, January 7th. Shareholders of record on Thursday, December 10th will be paid a $1.0854 dividend. This is a decrease from Taiwan Semiconductor Manufacturing's previous quarterly dividend of $1.1136. This represents a $4.34 dividend on an annualized basis and a yield of 1.1%. The ex-dividend date is Thursday, December 10th. Taiwan Semiconductor Manufacturing's dividend payout ratio is 22.07%.

Insider Activity at Taiwan Semiconductor Manufacturing

In other news, VP Lipen Yuan acquired 1,000 shares of the firm's stock in a transaction dated Tuesday, August 18th. The stock was bought at an average price of $74.50 per share, with a total value of $74,500.00. Following the transaction, the vice president directly owned 6,000 shares in the company, valued at approximately $447,000. The trade was a 20.00% increase in their position. The purchase was disclosed in a legal filing with the SEC, which is accessible through this hyperlink. Over the last ninety days, insiders have bought 6,043 shares of company stock valued at $457,926. Company insiders own 1.11% of the company's stock.

Institutional Investors Weigh In On Taiwan Semiconductor Manufacturing

Hedge funds have recently bought and sold shares of the company. Fiduciary Advisors Inc. raised its stake in Taiwan Semiconductor Manufacturing by 200.0% in the 3rd quarter. Fiduciary Advisors Inc. now owns 60 shares of the semiconductor company's stock valued at $27,000 after acquiring an additional 40 shares during the period. Evolution Wealth Management Inc. increased its holdings in shares of Taiwan Semiconductor Manufacturing by 257.7% in the first quarter. Evolution Wealth Management Inc. now owns 93 shares of the semiconductor company's stock valued at $31,000 after purchasing an additional 67 shares during the last quarter. Cedar Mountain Advisors LLC increased its holdings in shares of Taiwan Semiconductor Manufacturing by 88.2% in the second quarter. Cedar Mountain Advisors LLC now owns 64 shares of the semiconductor company's stock valued at $31,000 after purchasing an additional 30 shares during the last quarter. Financial Freedom LLC bought a new position in shares of Taiwan Semiconductor Manufacturing in the first quarter valued at about $32,000. Finally, Markowski Investments bought a new position in shares of Taiwan Semiconductor Manufacturing in the second quarter valued at about $33,000. 16.51% of the stock is currently owned by institutional investors and hedge funds.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited NYSE: TSM, commonly known as TSMC, is a dedicated semiconductor foundry headquartered in Hsinchu, Taiwan. The company manufactures integrated circuits for customers that design their own chips, allowing semiconductor, electronics, and technology companies to outsource production rather than operate their own fabrication facilities.

TSMC provides wafer fabrication services across a broad range of process technologies, including advanced nodes used in high-performance computing, smartphones, automotive systems, and artificial intelligence applications.

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