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

Key Points

• Shares fell about 1.8% to roughly $394 on Tuesday with volume slightly above average, pressured mainly by reports that Apple has held exploratory talks with Intel and Samsung, boosting Intel and threatening TSMC’s near‑term exclusivity with a key customer.
• Despite the pullback, TSMC is seen as a central beneficiary of the AI capex cycle—large customers like Nvidia and Google are driving capacity demand—and the company posts strong profitability metrics (net margin ~47%, ROE ~38%) supporting long‑term upside.
• Wall Street sentiment is broadly positive: most analysts maintain a Buy view (average price target ~$404.29), though some downgrades and concerns about a crowded, richly valued trade have prompted short‑term debate.

Shares of Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM - Get Free Report) dropped 1.8% on Tuesday . The stock traded as low as $392.60 and last traded at $394.3720. Approximately 14,312,464 shares changed hands during trading, an increase of 3% from the average daily volume of 13,909,830 shares. The stock had previously closed at $401.61.

Key Taiwan Semiconductor Manufacturing News

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

• Positive Sentiment: AI demand and strong fundamentals support long-term upside: multiple analysts and features note TSMC remains a central beneficiary of the AI capex cycle, with large customers (Nvidia, Google, etc.) driving capacity demand and supportive margin dynamics. Asia AI rally boosts TSMC (Barron's)
• Positive Sentiment: Sector flows and ETF activity continue to lift semiconductor peers and provide tailwinds for TSMC exposure in AI-themed funds and the proposed “AIR 7” grouping. AIR 7 discussion (Yahoo Finance)
• Neutral Sentiment: Bull/bear debate remains active: several pieces reiterate that TSMC’s growth runway is intact but that the stock is a crowded trade after strong gains — investors are weighing rich valuation vs. durable demand. Bull vs Bear on TSMC (Motley Fool)
• Neutral Sentiment: Industry talent and packaging competition: MediaTek hired a former TSMC executive to boost advanced packaging work — a development to watch for competitive dynamics in packaging technology. MediaTek hires former TSMC exec (Reuters)
• Negative Sentiment: Immediate negative catalyst — Apple’s exploratory talks with Intel and Samsung about U.S. production: multiple reports say Apple has discussed moving some main-device chip production to Intel/Samsung in the U.S., and Intel shares jumped on hopes of winning work. That news threatens TSMC’s perceived exclusivity with Apple and is the most likely near-term driver of the stock’s weakness. Intel/Apple chip talks (MSN)
• Negative Sentiment: Intel momentum and potential customer wins: follow-up coverage highlights investor optimism that Intel could land large manufacturing contracts, raising competitive risk and prompting short-term rotation out of TSMC into names seen as beneficiaries. Intel surge on potential deals (Yahoo)
• Negative Sentiment: Crowded trade / relative performance: commentary notes TSMC underperformed some peers in recent monthly comparisons (e.g., Qualcomm, Broadcom), which can prompt profit-taking in a richly valued name after big gains. April performance comparison (247wallst)

Wall Street Analysts Forecast Growth

TSM has been the subject of several recent research reports. Zacks Research lowered shares of Taiwan Semiconductor Manufacturing from a "strong-buy" rating to a "hold" rating in a research note on Monday, March 16th. DA Davidson restated a "buy" rating and set a $450.00 price target on shares of Taiwan Semiconductor Manufacturing in a research report on Friday, April 17th. Weiss Ratings upgraded shares of Taiwan Semiconductor Manufacturing from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Friday, March 20th. Wall Street Zen upgraded shares of Taiwan Semiconductor Manufacturing from a "hold" rating to a "buy" rating in a research report on Sunday, March 22nd. Finally, The Goldman Sachs Group restated a "buy" rating on shares of Taiwan Semiconductor Manufacturing in a research report on Monday, January 5th. Two analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating and two have given a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of "Buy" and an average price target of $404.29.

Taiwan Semiconductor Manufacturing Stock Down 1.8%

The firm's 50-day moving average price is $359.03 and its 200 day moving average price is $328.05. The firm has a market cap of $2.04 trillion, a P/E ratio of 32.81, a price-to-earnings-growth ratio of 1.16 and a beta of 1.39. The company has a quick ratio of 2.32, a current ratio of 2.51 and a debt-to-equity ratio of 0.17.

Taiwan Semiconductor Manufacturing (NYSE:TSM - Get Free Report) last released its quarterly earnings results on Tuesday, February 10th. The semiconductor company reported $3.11 EPS for the quarter. The business had revenue of $30.65 billion during the quarter. Taiwan Semiconductor Manufacturing had a net margin of 46.97% and a return on equity of 38.17%. As a group, research analysts expect that Taiwan Semiconductor Manufacturing Company Ltd. will post 15.24 earnings per share for the current year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Thursday, July 9th. Investors of record on Thursday, June 11th will be issued a $0.9503 dividend. The ex-dividend date of this dividend is Thursday, June 11th. This represents a $3.80 annualized dividend and a yield of 1.0%. Taiwan Semiconductor Manufacturing's dividend payout ratio is presently 24.96%.

Insiders Place Their Bets

In related news, VP Bor-Zen Tien acquired 1,000 shares of Taiwan Semiconductor Manufacturing stock in a transaction that occurred on Sunday, March 22nd. The stock was acquired at an average price of $55.93 per share, with a total value of $55,930.00. Following the completion of the acquisition, the vice president directly owned 9,051 shares of the company's stock, valued at $506,222.43. This trade represents a 12.42% increase in their position. The acquisition was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. 1.11% of the stock is owned by insiders.

Institutional Investors Weigh In On Taiwan Semiconductor Manufacturing

Institutional investors have recently bought and sold shares of the stock. Twin City Private Wealth LLC lifted its holdings in Taiwan Semiconductor Manufacturing by 0.3% in the 1st quarter. Twin City Private Wealth LLC now owns 7,315 shares of the semiconductor company's stock valued at $2,479,000 after acquiring an additional 25 shares during the last quarter. Financial Life Planners lifted its holdings in Taiwan Semiconductor Manufacturing by 3.4% in the 1st quarter. Financial Life Planners now owns 786 shares of the semiconductor company's stock valued at $266,000 after acquiring an additional 26 shares during the last quarter. Corus Family Wealth Advisors lifted its holdings in Taiwan Semiconductor Manufacturing by 1.1% in the 1st quarter. Corus Family Wealth Advisors now owns 2,401 shares of the semiconductor company's stock valued at $811,000 after acquiring an additional 26 shares during the last quarter. Lodestar Private Asset Management LLC lifted its holdings in Taiwan Semiconductor Manufacturing by 0.9% in the 1st quarter. Lodestar Private Asset Management LLC now owns 2,896 shares of the semiconductor company's stock valued at $979,000 after acquiring an additional 27 shares during the last quarter. Finally, Mitchell Sinkler & Starr PA lifted its holdings in Taiwan Semiconductor Manufacturing by 1.9% in the 4th quarter. Mitchell Sinkler & Starr PA now owns 1,482 shares of the semiconductor company's stock valued at $450,000 after acquiring an additional 28 shares during the last quarter. Institutional investors and hedge funds own 16.51% of the company's stock.

Taiwan Semiconductor Manufacturing Company Profile

Taiwan Semiconductor Manufacturing Company (TSMC) is a leading pure-play semiconductor foundry that provides wafer fabrication and related services to the global semiconductor industry. Founded in 1987 by Morris Chang and headquartered in Hsinchu, Taiwan, TSMC manufactures integrated circuits on behalf of fabless and integrated device manufacturers, offering contract chip production across a broad set of technologies and products.

TSMC's service offering covers logic and mixed-signal process technologies, specialty processes for radio-frequency, power management and embedded memory, and advanced nodes used in mobile, high-performance computing and AI applications.

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