Taiwan Semiconductor Manufacturing (NYSE:TSM) Trading Up 5.7% - Should You Buy?

Key Points

• TSMC shares rose 5.7% in Tuesday trading, with volume running above average, reflecting strong investor interest after recent positive developments.
• News flow around the company is broadly upbeat: TSMC reportedly plans to raise chipmaking prices by 5% to 10% in 2027, which could support margins, and recent results showed strong earnings plus an improved outlook driven by AI chip demand.
• Wall Street remains constructive overall, with analysts issuing multiple buy/strong-buy ratings and a consensus price target of about $490, though the Arizona expansion continues to raise some capital spending and execution concerns.

Shares of Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM - Get Free Report) traded up 5.7% during mid-day trading on Tuesday . The company traded as high as $425.40 and last traded at $425.0350. 18,112,433 shares changed hands during mid-day trading, an increase of 29% from the average session volume of 14,069,820 shares. The stock had previously closed at $402.30.

Key Stories Impacting Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: TSMC reportedly plans to raise chipmaking prices by 5% to 10% in 2027 for both advanced and mature nodes, boosting expectations for margin expansion and stronger pricing power. TSMC to raise chipmaking prices by up to 10% in 2027, Nikkei Asia reports
• Positive Sentiment: Recent coverage highlighted blowout Q2 results, with TSMC posting strong earnings and raising its outlook, reinforcing the view that AI-related chip demand remains robust. Bull of the Day: Taiwan Semi (TSM)
• Positive Sentiment: Analysts and market commentators continue to frame TSMC as a key AI infrastructure winner, with multiple articles pointing to sustained demand, capacity expansion, and improving long-term growth visibility. TSMC expects 'strong, multi-year' demand for AI chips as it ramps up Arizona investment
• Neutral Sentiment: Broader semiconductor stocks also rebounded after last week’s selloff, suggesting TSMC is benefiting from a sector-wide recovery in sentiment. Chip stocks extend global rebound following last week's rout
• Negative Sentiment: One cautionary theme is that TSMC’s aggressive Arizona expansion is raising capital spending and operational execution concerns, including labor and infrastructure constraints, which could pressure near-term sentiment. TSMC expects 'strong, multi-year' demand for AI chips as it ramps up Arizona investment

Analysts Set New Price Targets

A number of research analysts have recently commented on TSM shares. Susquehanna raised their target price on Taiwan Semiconductor Manufacturing from $575.00 to $600.00 and gave the company a "positive" rating in a research note on Thursday, July 16th. Weiss Ratings downgraded Taiwan Semiconductor Manufacturing from a "buy (b-)" rating to a "hold (c+)" rating in a report on Monday, July 13th. TD Cowen raised their price objective on Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the company a "hold" rating in a research report on Friday. DA Davidson boosted their target price on shares of Taiwan Semiconductor Manufacturing from $450.00 to $500.00 and gave the company a "buy" rating in a report on Friday. Finally, Zacks Research upgraded shares of Taiwan Semiconductor Manufacturing from a "hold" rating to a "strong-buy" rating in a research note on Thursday, July 16th. Three 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's stock. Based on data from MarketBeat.com, the company presently has a consensus rating of "Buy" and a consensus price target of $490.00.

Taiwan Semiconductor Manufacturing Price Performance

The company has a current ratio of 2.49, a quick ratio of 2.31 and a debt-to-equity ratio of 0.16. The company has a market cap of $2.20 trillion, a PE ratio of 30.67, a P/E/G ratio of 0.95 and a beta of 1.36. The firm has a 50 day moving average of $426.76 and a two-hundred day moving average of $379.20.

Taiwan Semiconductor Manufacturing (NYSE:TSM - Get Free Report) last posted its quarterly earnings data on Tuesday, June 30th. The semiconductor company reported $4.28 earnings per share for the quarter. The company had revenue of $39.89 billion during the quarter. Taiwan Semiconductor Manufacturing had a return on equity of 40.88% and a net margin of 50.31%. Research analysts predict that Taiwan Semiconductor Manufacturing Company Ltd. will post 15.83 earnings per share for the current fiscal year.

Taiwan Semiconductor Manufacturing Increases Dividend

The business also recently declared a quarterly dividend, which will be paid on Thursday, October 8th. Stockholders of record on Wednesday, September 16th will be issued a dividend of $1.1136 per share. The ex-dividend date is Wednesday, September 16th. This is a boost from Taiwan Semiconductor Manufacturing's previous quarterly dividend of $0.95. This represents a $4.45 annualized dividend and a dividend yield of 1.0%. Taiwan Semiconductor Manufacturing's dividend payout ratio is 25.32%.

Insider Transactions at Taiwan Semiconductor Manufacturing

In related news, VP Lipen Yuan purchased 1,000 shares of the stock in a transaction dated Monday, June 22nd. The stock was purchased at an average price of $79.19 per share, with a total value of $79,190.00. Following the transaction, the vice president directly owned 5,000 shares in the company, valued at $395,950. This trade represents a 25.00% increase in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, VP Bor-Zen Tien purchased 2,000 shares of the company's stock in a transaction that occurred on Tuesday, May 19th. The stock was purchased at an average price of $69.91 per share, for a total transaction of $139,820.00. Following the purchase, the vice president owned 11,051 shares in the company, valued at $772,575.41. This represents a 22.10% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Insiders purchased a total of 6,857 shares of company stock valued at $512,334 in the last quarter. 1.11% of the stock is owned by insiders.

Institutional Investors Weigh In On Taiwan Semiconductor Manufacturing

Several institutional investors and hedge funds have recently made changes to their positions in the company. Cedar Mountain Advisors LLC raised its stake 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 worth $31,000 after purchasing an additional 30 shares during the last quarter. Quattro Advisors LLC bought a new stake in Taiwan Semiconductor Manufacturing in the 4th quarter worth about $25,000. Hilton Head Capital Partners LLC bought a new stake in Taiwan Semiconductor Manufacturing in the 4th quarter worth about $27,000. Stephens Consulting LLC raised its position in Taiwan Semiconductor Manufacturing by 82.0% in the 4th quarter. Stephens Consulting LLC now owns 91 shares of the semiconductor company's stock worth $28,000 after buying an additional 41 shares during the last quarter. Finally, Evolution Wealth Management Inc. raised its position in Taiwan Semiconductor Manufacturing by 257.7% in the 1st quarter. Evolution Wealth Management Inc. now owns 93 shares of the semiconductor company's stock worth $31,000 after buying an additional 67 shares during the last quarter. Institutional investors 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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