Taiwan Semiconductor Manufacturing (NYSE:TSM) Trading Down 3% – Should You Sell?

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) traded down 3% during mid-day trading on Friday . The stock traded as low as $386.02 and last traded at $397.5910. Approximately 20,848,428 shares changed hands during mid-day trading, an increase of 48% from the average daily volume of 14,079,226 shares. The stock had previously closed at $409.74.

Key Stories Impacting Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: TSMC reported another standout quarter, with revenue up 33.7% year over year, profit up 77%, and earnings beating estimates, reinforcing that demand for advanced AI chips remains extremely strong.
• Positive Sentiment: The company raised its 2026 growth outlook to above 40% and boosted capital spending plans, signaling management expects AI-driven demand to stay robust well beyond this quarter.
• Positive Sentiment: Analysts remained constructive after the report, with Zacks upgrading TSMC to Strong Buy and TD Cowen raising its price target, reflecting confidence in the company’s earnings trajectory.
• Positive Sentiment: Several reports highlighted that TSMC’s expanded U.S. investment and capacity buildout should support long-term leadership in leading-edge chips and advanced packaging. TSMC Q2 profit jumps 77% to record, far surpasses expectations
• Neutral Sentiment: Despite the strong fundamentals, TSMC and other AI chip names were caught in a broader semiconductor selloff as investors questioned how much more capital spending the AI boom can absorb and whether returns will stay as high.
• Neutral Sentiment: Weakness across Asian and U.S. chip stocks, including Nvidia, AMD, Micron, and others, pressured TSMC shares even after the earnings beat, suggesting sector-wide rotation rather than company-specific disappointment.
• Negative Sentiment: The biggest concern weighing on the stock is TSMC’s sharply higher capex and additional $100 billion U.S. expansion plan, which raised fears of margin pressure and lower free cash flow in the near term.
• Negative Sentiment: Investor sentiment also weakened because expectations for AI leaders are already very high, so even excellent results were seen as not enough to reaccelerate the stock immediately.

Wall Street Analysts Forecast Growth

A number of analysts have commented on TSM shares. Bank of America boosted their price target on shares of Taiwan Semiconductor Manufacturing from $490.00 to $590.00 and gave the company a “buy” rating in a research note on Wednesday, June 24th. TD Cowen lifted their price objective on shares of Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the company a “hold” rating in a report on Friday. Wall Street Zen raised shares of Taiwan Semiconductor Manufacturing from a “hold” rating to a “buy” rating in a research report on Sunday, March 22nd. Needham & Company LLC upped their target price on shares of Taiwan Semiconductor Manufacturing from $410.00 to $480.00 and gave the stock a “buy” rating in a report on Thursday, April 16th. Finally, Citigroup reaffirmed a “buy” rating on shares of Taiwan Semiconductor Manufacturing in a research report on Monday, July 6th. Two equities research analysts have rated the stock with a Strong Buy rating, eleven have assigned a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average target price of $490.00.

Taiwan Semiconductor Manufacturing Price Performance

The firm has a market cap of $2.06 trillion, a P/E ratio of 33.08, a P/E/G ratio of 1.04 and a beta of 1.36. The company has a fifty day moving average of $427.06 and a 200-day moving average of $377.80. The company has a debt-to-equity ratio of 0.16, a current ratio of 2.49 and a quick ratio of 2.31.

Taiwan Semiconductor Manufacturing (NYSE:TSM) last issued its quarterly earnings data on Tuesday, June 30th. The semiconductor company reported $4.28 earnings per share for the quarter. The business had revenue of $39.89 billion for the quarter. Taiwan Semiconductor Manufacturing had a return on equity of 36.81% and a net margin of 46.97%. On average, sell-side analysts anticipate that Taiwan Semiconductor Manufacturing Company Ltd. will post 15.44 EPS for the current fiscal year.

Taiwan Semiconductor Manufacturing Increases Dividend

The company also recently declared a quarterly dividend, which will be paid on Thursday, October 8th. Investors of record on Wednesday, September 16th will be issued a dividend of $1.1136 per share. This represents a $4.45 annualized dividend and a yield of 1.1%. This is a boost from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $0.95. The ex-dividend date is Wednesday, September 16th. Taiwan Semiconductor Manufacturing’s dividend payout ratio is presently 24.71%.

Insider Buying and Selling

In other news, VP Lipen Yuan bought 1,000 shares of the company’s stock in a transaction on Monday, June 22nd. The shares were 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 represents a 25.00% increase in their ownership of the stock. The purchase was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, VP Tzu-Sou Chuang sold 200,000 shares of the business’s stock in a transaction that occurred on Tuesday, May 19th. The stock was sold at an average price of $69.83, for a total value of $13,966,000.00. Following the completion of the transaction, the vice president owned 2,495,165 shares in the company, valued at $174,237,371.95. The trade was a 7.42% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have bought 6,857 shares of company stock worth $512,334. 1.11% of the stock is owned by insiders.

Institutional Trading of Taiwan Semiconductor Manufacturing

A number of institutional investors and hedge funds have recently modified their holdings of TSM. Cedar Mountain Advisors LLC grew its stake in Taiwan Semiconductor Manufacturing by 88.2% in the 2nd quarter. Cedar Mountain Advisors LLC now owns 64 shares of the semiconductor company’s stock valued at $31,000 after purchasing an additional 30 shares during the period. Quattro Advisors LLC bought a new stake in shares of Taiwan Semiconductor Manufacturing during the 4th quarter worth $25,000. Hilton Head Capital Partners LLC bought a new stake in shares of Taiwan Semiconductor Manufacturing during the 4th quarter worth $27,000. Stephens Consulting LLC boosted its holdings in shares of 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. boosted its holdings in shares of 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. 16.51% of the stock is owned by hedge funds and other institutional investors.

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.