Taiwan Semiconductor Manufacturing (NYSE:TSM) Stock Falls 1.9% - Here's What Happened

Key Points

• TSMC shares fell 1.9% to about $431.18 on lower-than-average trading volume, despite the stock remaining above its 200-day moving average.
• Strong AI-related demand continues to support TSMC, with advanced packaging reportedly facing potential price increases of up to 20%, while third-quarter revenue rose 41.2% year over year and earnings exceeded estimates.
• Analyst sentiment remains broadly positive, with a consensus “Buy” rating and an average price target of $528.78, although concerns about valuation and execution have introduced a more cautious outlook.

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM - Get Free Report)'s share price dropped 1.9% during trading on Thursday. The stock traded as low as $428.43 and last traded at $431.1820. Approximately 8,257,932 shares were traded during trading, a decline of 36% from the average session volume of 12,995,379 shares. The stock had previously closed at $439.51.

Key Stories Impacting Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: TSMC’s advanced packaging remains in very high demand. Reports that the company may raise CoWoS prices by as much as 20%, alongside potential 3%–6% wafer price increases, point to strong capacity utilization and pricing power with major customers such as Nvidia and AMD. TSMC Gains 3% on Reported 20% Price Hike for AI Chip Packaging
• Positive Sentiment: Recent coverage continues to highlight TSMC as a key beneficiary of the AI infrastructure cycle. Third-quarter revenue increased 41.2%, while AI chip demand and the ramp of 2-nanometer production support the company’s growth outlook. Beyond NVIDIA: Why TSMC Stock Looks Attractive After Q3 Earnings
• Positive Sentiment: Bell Global Equities Fund continues to favor TSMC, reflecting institutional confidence in its competitive position and exposure to long-term semiconductor growth. Other commentary also describes TSMC as a “toll road” for the AI economy and a potential long-term AI winner. Why Bell Global Equities Fund Continues to Favor TSM
• Neutral Sentiment: Taiwan’s semiconductor industry association backed a government review of potentially restarting nuclear power plants. More reliable or lower-cost electricity could benefit TSMC’s energy-intensive fabs, although the review does not represent an immediate change in operations. Taiwan Semiconductor Industry Group Backs Nuclear Review
• Negative Sentiment: A Seeking Alpha article titled “TSMC: The Cracks Are Showing” introduces a more cautious narrative, likely contributing to investor concern about execution, spending or the durability of current growth. The company’s elevated valuation may make the stock more sensitive to such doubts. TSMC: The Cracks Are Showing

Analyst Ratings Changes

A number of equities research analysts recently commented on TSM shares. TD Cowen increased their price target on Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the stock a "hold" rating in a research report on Friday, July 17th. Wall Street Zen cut shares of Taiwan Semiconductor Manufacturing from a "strong-buy" rating to a "buy" rating in a research report on Saturday, August 8th. Susquehanna boosted their price objective on shares of Taiwan Semiconductor Manufacturing from $575.00 to $600.00 and gave the stock a "positive" rating in a research report on Thursday, July 16th. Barclays lifted their target price on Taiwan Semiconductor Manufacturing from $665.00 to $670.00 and gave the company an "overweight" rating in a research note on Friday, October 16th. Finally, DA Davidson reiterated a "buy" rating and issued a $500.00 price target on shares of Taiwan Semiconductor Manufacturing in a report on Friday, October 16th. Three research analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating and one has issued a Hold rating to the company's stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Buy" and a consensus price target of $528.78.

Taiwan Semiconductor Manufacturing Trading Down 1.9%

The business has a 50 day moving average price of $434.85 and a 200 day moving average price of $398.58. The company has a market capitalization of $2.24 trillion, a P/E ratio of 27.75, a PEG ratio of 0.85 and a beta of 1.37. The company has a current ratio of 2.46, a quick ratio of 2.25 and a debt-to-equity ratio of 0.14.

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

Taiwan Semiconductor Manufacturing Cuts Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, January 7th. Investors of record on Thursday, December 10th will be issued a dividend of $1.0854 per share. The ex-dividend date is Thursday, December 10th. This is a drop from Taiwan Semiconductor Manufacturing's previous quarterly dividend of $1.1136. This represents a $4.34 dividend on an annualized basis and a dividend yield of 1.0%. Taiwan Semiconductor Manufacturing's dividend payout ratio is 22.27%.

Insider Buying and Selling

In other news, VP Lipen Yuan purchased 1,000 shares of Taiwan Semiconductor Manufacturing stock in a transaction on Tuesday, August 18th. The stock was purchased 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 $447,000. The trade was a 20.00% increase in their position. The acquisition was disclosed in a document filed with the SEC, which can be accessed through this link. Also, VP Bor-Zen Tien acquired 1,000 shares of the stock in a transaction dated Monday, August 3rd. The stock was acquired at an average price of $73.06 per share, for a total transaction of $73,060.00. Following the completion of the acquisition, the vice president directly owned 14,051 shares of the company's stock, valued at $1,026,566.06. The trade was a 7.66% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. In the last ninety days, insiders have acquired 7,043 shares of company stock valued at $530,986. Insiders own 1.11% of the company's stock.

Hedge Funds Weigh In On Taiwan Semiconductor Manufacturing

Several hedge funds and other institutional investors have recently made changes to their positions in the company. Tiger Global Management LLC grew its stake in Taiwan Semiconductor Manufacturing by 49.4% during the 1st quarter. Tiger Global Management LLC now owns 5,565,074 shares of the semiconductor company's stock valued at $1,880,717,000 after purchasing an additional 1,839,600 shares during the last quarter. Sei Investments Co. lifted its stake in Taiwan Semiconductor Manufacturing by 11.8% during the 1st quarter. Sei Investments Co. now owns 2,591,510 shares of the semiconductor company's stock valued at $875,802,000 after acquiring an additional 274,389 shares during the period. Assenagon Asset Management S.A. lifted its holdings in shares of Taiwan Semiconductor Manufacturing by 67.2% in the 3rd quarter. Assenagon Asset Management S.A. now owns 1,717,515 shares of the semiconductor company's stock valued at $783,513,000 after buying an additional 690,523 shares during the period. Bessemer Group Inc. boosted its stake in shares of Taiwan Semiconductor Manufacturing by 7.9% in the first quarter. Bessemer Group Inc. now owns 1,781,764 shares of the semiconductor company's stock worth $602,147,000 after buying an additional 130,602 shares during the last quarter. Finally, Bank Julius Baer & Co. Ltd Zurich grew its holdings in Taiwan Semiconductor Manufacturing by 25.1% during the third quarter. Bank Julius Baer & Co. Ltd Zurich now owns 1,210,323 shares of the semiconductor company's stock worth $552,116,000 after acquiring an additional 242,640 shares during the period. 16.51% of the stock is owned by institutional investors.

Taiwan Semiconductor Manufacturing Company Profile

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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