Taiwan Semiconductor Manufacturing (NYSE:TSM) Stock Falls 1.1% – Time to Sell?

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM)’s stock price fell 1.1% during trading on Friday. The company traded as low as $449.75 and last traded at $452.8650. 9,156,641 shares changed hands during mid-day trading, a decline of 30% from the average session volume of 13,065,922 shares. The stock had previously closed at $457.99.

Key Headlines Impacting Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: Record AI demand: TSMC reported third-quarter revenue of NT$1.49 trillion, or approximately $46.7 billion, up 50.9% year over year and ahead of consensus estimates. September sales increased 54.6% year over year to NT$511.86 billion, confirming that demand for advanced AI processors from customers such as Nvidia and AMD remains robust. TSMC’s third-quarter revenue surges to record, beating market forecast
• Positive Sentiment: Strong profitability: Coverage highlighted a 77.4% year-over-year increase in second-quarter net income and diluted EPS, alongside 36% revenue growth. The results reinforce TSMC’s pricing power and operating leverage as advanced-node and AI-chip demand expands. Taiwan Semiconductor Grew Profits 77.4%
• Positive Sentiment: More advanced-packaging capacity: TSMC agreed to a multiyear, $2 billion arrangement with GlobalFoundries to secure U.S.-made silicon interposers for its CoWoS packaging ecosystem. The deal supports AI and high-performance-computing growth and could improve supply-chain resilience, although volume production is not expected until 2028. GlobalFoundries Lands $2 Billion TSMC Deal
• Positive Sentiment: Constructive analyst and insider signals: Analysts continue to rate TSM positively, with reported price targets above the current trading level. CEO Che-Chia Wei and several other executives also made small open-market purchases, suggesting confidence in the long-term outlook. TSM analyst coverage
• Neutral Sentiment: Potential involvement in Elon Musk’s Tesla-SpaceX “Terafab” project could create additional U.S. manufacturing or capacity opportunities, but reports indicate TSMC may only sublease part of the facility while Intel remains involved. The timing and economics remain uncertain. Intel and Terafab report
• Negative Sentiment: Valuation and profit-taking are weighing on the stock: Following a substantial rally toward its 52-week high, investors are questioning how much of TSMC’s exceptional AI growth is already reflected in its valuation. Strong results therefore failed to generate sustained buying interest.
• Negative Sentiment: Macro pressure: Rising oil prices and Treasury yields have weakened the broader technology market, encouraging investors to reduce exposure to high-growth semiconductor stocks even as TSMC’s fundamentals remain strong.

Analyst Ratings Changes

Several analysts recently issued reports on TSM shares. Zacks Research upgraded shares of Taiwan Semiconductor Manufacturing from a “hold” rating to a “strong-buy” rating in a report on Thursday, July 16th. TD Cowen upped their price objective 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. Needham & Company LLC increased their price objective on shares of Taiwan Semiconductor Manufacturing from $480.00 to $530.00 and gave the stock a “buy” rating in a research report on Monday, July 27th. Sanford C. Bernstein lifted their target price on shares of Taiwan Semiconductor Manufacturing from $430.00 to $554.00 and gave the company an “outperform” rating in a report on Tuesday, August 11th. Finally, Wall Street Zen cut Taiwan Semiconductor Manufacturing from a “strong-buy” rating to a “buy” rating in a research note on Saturday, August 8th. Three analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of “Buy” and a consensus target price of $524.89.

Taiwan Semiconductor Manufacturing Stock Down 1.1%

The business has a 50-day simple moving average of $432.16 and a 200-day simple moving average of $413.53. The company has a debt-to-equity ratio of 0.14, a quick ratio of 2.25 and a current ratio of 2.46. The company has a market cap of $2.35 trillion, a price-to-earnings ratio of 32.67, a price-to-earnings-growth ratio of 1.05 and a beta of 1.37.

Taiwan Semiconductor Manufacturing (NYSE:TSM) last released its earnings results on Tuesday, June 30th. The semiconductor company reported $4.28 earnings per share for the quarter. Taiwan Semiconductor Manufacturing had a net margin of 50.31% and a return on equity of 39.25%. The firm had revenue of $39.89 billion for the quarter. On average, equities analysts anticipate that Taiwan Semiconductor Manufacturing Company Ltd. will post 16.56 earnings per share 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. Shareholders of record on Thursday, December 10th will be paid a $1.0854 dividend. 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 yield of 1.0%. The ex-dividend date is Thursday, December 10th. Taiwan Semiconductor Manufacturing’s payout ratio is 24.75%.

Insiders Place Their Bets

In other Taiwan Semiconductor Manufacturing news, 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 cost of $73.06 per share, with a total value of $73,060.00. Following the transaction, the vice president owned 14,051 shares in the company, valued at $1,026,566.06. The trade was a 7.66% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, VP Shyue-Shyh Lin acquired 1,000 shares of the company’s stock in a transaction dated Tuesday, July 21st. The stock was acquired at an average price of $74.13 per share, for a total transaction of $74,130.00. Following the acquisition, the vice president owned 30,269 shares in the company, valued at approximately $2,243,840.97. The trade was a 3.42% increase in their position. The SEC filing for this purchase provides additional information. Insiders acquired 16,043 shares of company stock valued at $1,185,746 in the last ninety days. Insiders own 1.11% of the company’s stock.

Institutional Inflows and Outflows

A number of hedge funds have recently modified their holdings of TSM. Janus Henderson Group PLC increased its position in shares of Taiwan Semiconductor Manufacturing by 7.7% during the fourth quarter. Janus Henderson Group PLC now owns 8,291,884 shares of the semiconductor company’s stock worth $2,497,638,000 after purchasing an additional 594,780 shares in the last quarter. 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 worth $1,880,717,000 after buying an additional 1,839,600 shares during the last quarter. Invesco Ltd. increased its position in Taiwan Semiconductor Manufacturing by 1.1% during the fourth quarter. Invesco Ltd. now owns 3,721,823 shares of the semiconductor company’s stock worth $1,131,025,000 after buying an additional 40,842 shares during the period. Sei Investments Co. lifted its stake in Taiwan Semiconductor Manufacturing by 11.8% in the first quarter. Sei Investments Co. now owns 2,591,510 shares of the semiconductor company’s stock valued at $875,802,000 after buying an additional 274,389 shares during the last quarter. Finally, T. Rowe Price Investment Management Inc. lifted its stake in Taiwan Semiconductor Manufacturing by 168.6% in the fourth 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 buying an additional 1,313,917 shares during the last quarter. 16.51% of the stock is owned by hedge funds and other institutional investors.

Taiwan Semiconductor Manufacturing Company Profile

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.