Taiwan Semiconductor Manufacturing (NYSE:TSM) Shares Down 3% – Here’s Why

Shares of Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) dropped 3% on Thursday. The company traded as low as $452.88 and last traded at $457.9350. Approximately 13,092,649 shares were traded during mid-day trading, an increase of 0% from the average daily volume of 13,084,917 shares. The stock had previously closed at $472.20.

Key Stories 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% year over year and ahead of analyst expectations. September sales increased 54.6% year over year, reinforcing strong demand for advanced chips used in artificial intelligence and high-performance computing. TSMC’s third-quarter revenue surges to record, beating market forecast
• Positive Sentiment: More advanced-packaging capacity: TSMC agreed to a multiyear, $2 billion manufacturing arrangement with GlobalFoundries to produce U.S.-made silicon interposers for TSMC’s CoWoS advanced-packaging ecosystem. The deal supports future AI capacity, although volume production is not expected to ramp until 2028. GlobalFoundries Lands $2 Billion TSMC Deal to Expand US AI Chip Packaging
• Positive Sentiment: Supportive industry outlook: Analysts and market commentators continue to identify semiconductors as a leading October sector, while strong results from TSMC and Samsung suggest AI infrastructure spending remains intact. TSMC’s earnings report next week could provide additional guidance on demand, margins and capital expenditures. Record Profits at Samsung and TSMC Say the AI Trade is Intact
• Neutral Sentiment: TSMC CEO Che-Chia Wei and other executives reported modest open-market purchases. The buying may indicate management confidence, but the transactions are small relative to the company’s market capitalization. TSMC Insider Buying and Selling
• Negative Sentiment: Valuation and profit-taking: Despite record revenue and approximately 77% year-over-year profit growth in the latest reported quarter, investors are questioning whether the AI gains are already reflected in TSM’s premium valuation. The stock is trading near its 52-week high, increasing sensitivity to earnings expectations.
• Negative Sentiment: Macro and geopolitical risks: Rising Treasury yields and oil prices have pressured technology stocks broadly. Taiwan-related geopolitical concerns and uncertainty surrounding a potential Musk-linked Terafab project are additional risks, particularly because TSMC’s exact role remains unclear.

Analysts Set New Price Targets

A number of research firms have recently issued reports on TSM. TD Cowen upped their target price 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. DA Davidson raised their price target on shares of Taiwan Semiconductor Manufacturing from $450.00 to $500.00 and gave the stock a “buy” rating in a research note on Friday, July 17th. Stifel Nicolaus began coverage on shares of Taiwan Semiconductor Manufacturing in a research report on Tuesday, September 1st. They set a “buy” rating and a $515.00 price target on the stock. Citigroup reiterated a “buy” rating on shares of Taiwan Semiconductor Manufacturing in a report on Wednesday. Finally, Sanford C. Bernstein upped their price target on Taiwan Semiconductor Manufacturing from $430.00 to $554.00 and gave the company an “outperform” rating in a research report on Tuesday, August 11th. 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’s stock. Based on data from MarketBeat.com, the stock currently has an average rating of “Buy” and a consensus target price of $524.89.

Taiwan Semiconductor Manufacturing Stock Down 1.1%

The firm’s fifty day simple moving average is $433.13 and its two-hundred day simple moving average is $413.81. The company has a current ratio of 2.46, a quick ratio of 2.25 and a debt-to-equity ratio of 0.14. The company has a market capitalization of $2.35 trillion, a price-to-earnings ratio of 32.67, a price-to-earnings-growth ratio of 1.01 and a beta of 1.37.

Taiwan Semiconductor Manufacturing (NYSE:TSM) last released its quarterly earnings results on Tuesday, June 30th. The semiconductor company reported $4.28 EPS for the quarter. The firm had revenue of $39.89 billion for the quarter. Taiwan Semiconductor Manufacturing had a net margin of 50.31% and a return on equity of 39.25%. Sell-side analysts anticipate that Taiwan Semiconductor Manufacturing Company Ltd. will post 16.56 EPS for the current year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The business 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 $1.0854 dividend. This is a decrease from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $1.1136. The ex-dividend date is Thursday, December 10th. This represents a $4.34 annualized dividend and a yield of 1.0%. Taiwan Semiconductor Manufacturing’s payout ratio is presently 24.96%.

Insider Buying and Selling at Taiwan Semiconductor Manufacturing

In related news, VP Lipen Yuan acquired 350 shares of the firm’s stock in a transaction dated Tuesday, August 18th. The shares were purchased at an average cost of $73.58 per share, for a total transaction of $25,753.00. Following the acquisition, the vice president owned 2,000 shares in the company, valued at $147,160. The trade was a 21.21% increase in their position. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, VP Shyue-Shyh Lin bought 1,000 shares of the company’s stock in a transaction that occurred on Tuesday, July 21st. The stock was bought at an average price of $74.13 per share, with a total value of $74,130.00. Following the acquisition, the vice president directly owned 30,269 shares in the company, valued at $2,243,840.97. The trade was a 3.42% increase in their position. The SEC filing for this purchase provides additional information. Insiders purchased a total of 16,043 shares of company stock worth $1,185,746 over the last three months. Insiders own 1.11% of the company’s stock.

Hedge Funds Weigh In On Taiwan Semiconductor Manufacturing

Several institutional investors have recently bought and sold shares of TSM. Janus Henderson Group PLC grew its holdings in shares of Taiwan Semiconductor Manufacturing by 7.7% in the fourth quarter. Janus Henderson Group PLC now owns 8,291,884 shares of the semiconductor company’s stock valued at $2,497,638,000 after purchasing an additional 594,780 shares in the last quarter. Tiger Global Management LLC lifted its holdings 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 in the last quarter. Invesco Ltd. boosted its position in Taiwan Semiconductor Manufacturing by 1.1% in the 4th quarter. Invesco Ltd. now owns 3,721,823 shares of the semiconductor company’s stock valued at $1,131,025,000 after buying an additional 40,842 shares during the period. Sei Investments Co. grew its stake in shares of 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 worth $875,802,000 after acquiring an additional 274,389 shares in the last quarter. Finally, T. Rowe Price Investment Management Inc. increased its position in shares of Taiwan Semiconductor Manufacturing by 168.6% during the fourth quarter. T. Rowe Price Investment Management Inc. now owns 2,093,115 shares of the semiconductor company’s stock worth $636,077,000 after acquiring an additional 1,313,917 shares during the period. 16.51% of the stock is owned by institutional investors and hedge funds.

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.