Taiwan Semiconductor Manufacturing (NYSE:TSM) Stock Price Down 2.2% - Here's What Happened

Key Points

• TSMC shares fell 2.2% to about $413 amid a broader semiconductor-sector selloff, concerns over AI-related debt financing, and worries about the company’s planned capital expenditures of up to $64 billion.
• Despite the decline, TSMC reported its sixth consecutive record-profit quarter, with third-quarter net income up about 69% year over year and advanced technologies accounting for 79% of wafer revenue. Fourth-quarter revenue guidance of $52.3 billion to $54.3 billion exceeded analyst expectations.
• Analysts remain broadly bullish, with the stock carrying an average “Buy” rating and a $528.78 price target; several firms recently raised or reiterated targets, citing strong AI demand and TSMC’s leading-edge manufacturing position.

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM - Get Free Report)'s stock price traded down 2.2% on Friday. The company traded as low as $410.58 and last traded at $413.1480. 16,014,792 shares changed hands during mid-day trading, an increase of 22% from the average daily volume of 13,096,113 shares. The stock had previously closed at $422.25.

Key Taiwan Semiconductor Manufacturing News

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

• Positive Sentiment: TSMC reported its sixth consecutive record-profit quarter. Third-quarter net income rose approximately 69% year over year to about NT$763 billion, while revenue increased roughly 51% to NT$1.49 trillion. Advanced technologies, including 3-nanometer production, represented 79% of wafer revenue. TSMC posts record profit for a sixth straight quarter
• Positive Sentiment: The company issued fourth-quarter revenue guidance of $52.3 billion to $54.3 billion, well above the roughly $48.8 billion analyst consensus. Management also indicated that AI and high-performance-computing demand remains strong, with full-year 2026 revenue growth expected near 44%. TSMC: 3 Key Takeaways for Long-Term Investors
• Positive Sentiment: DA Davidson reaffirmed its Buy rating with a $500 price target, while Needham raised its target to $560. Analysts remain bullish on TSMC’s leading-edge manufacturing position and expect annual 2-nanometer capacity to more than double in 2027. TSMC Doubles Down on CapEx as Agentic AI Expands
• Neutral Sentiment: TSMC is reportedly exploring additional U.S. manufacturing opportunities, including potential participation in Elon Musk’s Texas “Terafab” project. Such expansion could improve customer access and supply resilience but would require substantial investment.
• Negative Sentiment: Investors are concerned about TSMC’s planned capital expenditures of up to $64 billion and whether AI-related demand and financing can justify the industry’s rapidly rising investment. These concerns have overshadowed the earnings beat and guidance increase. Why TSMC’s $64B Spending Plan Shouldn’t Deter Investors
• Negative Sentiment: A wider chip-stock selloff, concerns about AI debt financing and a jury verdict affecting Qualcomm and Arm have pressured the semiconductor sector, limiting the positive reaction to TSMC’s results. Chip Selloff Extends

Analyst Ratings Changes

TSM has been the topic of a number of recent analyst reports. Stifel Nicolaus assumed coverage on Taiwan Semiconductor Manufacturing in a research note on Tuesday, September 1st. They set a "buy" rating and a $515.00 price target on the stock. Barclays lifted their price objective on Taiwan Semiconductor Manufacturing from $665.00 to $670.00 and gave the company an "overweight" rating in a research report on Friday. DA Davidson reiterated a "buy" rating and set a $500.00 target price on shares of Taiwan Semiconductor Manufacturing in a research report on Friday. Wall Street Zen lowered Taiwan Semiconductor Manufacturing from a "strong-buy" rating to a "buy" rating in a research note on Saturday, August 8th. Finally, TD Cowen upped their price objective on shares of Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the company a "hold" rating in a research note on Friday, July 17th. Three research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and two have issued a Hold rating to the company. According to data from MarketBeat.com, Taiwan Semiconductor Manufacturing currently has an average rating of "Buy" and an average price target of $528.78.

Taiwan Semiconductor Manufacturing Stock Down 2.2%

The stock has a fifty day moving average of $434.85 and a two-hundred day moving average of $417.14. The company has a quick ratio of 2.25, a current ratio of 2.46 and a debt-to-equity ratio of 0.14. The stock has a market cap of $2.14 trillion, a price-to-earnings ratio of 29.81, a PEG ratio of 0.89 and a beta of 1.37.

Taiwan Semiconductor Manufacturing (NYSE:TSM - Get Free Report) last released its quarterly earnings data on Tuesday, September 8th. The semiconductor company reported $4.62 EPS for the quarter. The company had revenue of $46.87 billion for the quarter. Taiwan Semiconductor Manufacturing had a return on equity of 39.25% and a net margin of 50.31%. As a group, analysts predict that Taiwan Semiconductor Manufacturing Company Ltd. will post 16.60 EPS for the current fiscal year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, January 7th. Investors of record on Thursday, December 10th will be given a dividend of $1.0854 per share. This is a negative change from Taiwan Semiconductor Manufacturing's previous quarterly dividend of $1.1136. The ex-dividend date of this dividend is Thursday, December 10th. This represents a $4.34 dividend on an annualized basis and a yield of 1.1%. Taiwan Semiconductor Manufacturing's dividend payout ratio is currently 24.96%.

Insiders Place Their Bets

In related news, VP Lipen Yuan bought 1,000 shares of the company's stock in a transaction that occurred on Tuesday, August 18th. The shares were acquired at an average cost of $74.50 per share, for a total transaction of $74,500.00. Following the acquisition, the vice president owned 6,000 shares in the company, valued at $447,000. This represents a 20.00% increase in their position. The purchase was disclosed in a filing with the SEC, which can be accessed through this link. Also, VP Bor-Zen Tien acquired 3,000 shares of the company's stock in a transaction dated Tuesday, July 21st. The shares were purchased at an average price of $74.39 per share, for a total transaction of $223,170.00. Following the purchase, the vice president directly owned 4,000 shares of the company's stock, valued at approximately $297,560. This trade represents a 300.00% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Insiders have purchased a total of 16,043 shares of company stock worth $1,185,746 over the last quarter. 1.11% of the stock is owned by corporate insiders.

Institutional Trading of Taiwan Semiconductor Manufacturing

A number of hedge funds and other institutional investors have recently made changes to their positions in the stock. Tiger Global Management LLC boosted its holdings in Taiwan Semiconductor Manufacturing by 49.4% in the first quarter. Tiger Global Management LLC now owns 5,565,074 shares of the semiconductor company's stock worth $1,880,717,000 after purchasing an additional 1,839,600 shares during the period. T. Rowe Price Investment Management Inc. boosted its stake in Taiwan Semiconductor Manufacturing by 168.6% during the 4th quarter. T. Rowe Price Investment Management Inc. now owns 2,093,115 shares of the semiconductor company's stock valued at $636,077,000 after purchasing an additional 1,313,917 shares during the period. Corient Private Wealth LLC increased its stake in shares of Taiwan Semiconductor Manufacturing by 330.0% in the fourth quarter. Corient Private Wealth LLC now owns 1,583,175 shares of the semiconductor company's stock valued at $481,111,000 after purchasing an additional 1,215,035 shares during the period. Fundsmith LLP bought a new position in Taiwan Semiconductor Manufacturing in the 2nd quarter worth approximately $548,465,000. Finally, Assenagon Asset Management S.A. bought a new stake in Taiwan Semiconductor Manufacturing during the 2nd quarter valued at $490,461,000. Institutional investors own 16.51% of the company's stock.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited NYSE: TSM, commonly known as TSMC, is a Taiwan-based semiconductor manufacturer and the world's largest dedicated semiconductor foundry. Founded in 1987 by Morris Chang, the company pioneered the pure-play foundry model, producing chips designed by other companies rather than selling products under its own semiconductor brand.

TSMC manufactures a broad range of integrated circuits, including advanced logic chips used in high-performance computing, smartphones, automotive systems, communications equipment, and consumer electronics.

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