Taiwan Semiconductor Manufacturing (NYSE:TSM) Stock Falls 2.5% – Should You Sell?

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) was down 2.5% during mid-day trading on Wednesday. The company traded as low as $391.61 and last traded at $394.8110. 14,334,138 shares changed hands during mid-day trading, an increase of 10% from the average session volume of 13,022,273 shares. The stock had previously closed at $404.80.

Key Headlines Impacting Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: Taiwan tightened short-selling rules and prepared a reported $15 billion fund to support its markets, helping lift TSMC shares in premarket trading after the regional chip rout. Benzinga article
• Positive Sentiment: Nvidia reportedly wants TSMC to make advanced memory chips. If TSMC pursues the opportunity, it could broaden its role in AI hardware and deepen ties with a major customer; the report describes a possibility, not a confirmed project. TipRanks article
• Positive Sentiment: Sanford C. Bernstein raised its price target to $600 from $554 and reiterated an “outperform” rating, signaling confidence in TSMC’s prospects despite the recent sector weakness. MarketBeat analyst update
• Neutral Sentiment: TSMC’s position as a leading manufacturer for Nvidia, AMD and other chip designers supports exposure to AI demand across competing customers. Some coverage also argues the shares trade below their usual valuation range, though that does not ensure a near-term recovery. The Motley Fool article
• Negative Sentiment: The rebound follows a steep regional chip-stock selloff amid worries about AI valuations, spending expectations and growth. That market-wide pressure could keep TSM volatile even as its manufacturing business benefits from AI demand. 24/7 Wall St. article

Wall Street Analysts Forecast Growth

A number of research firms have recently weighed in on TSM. TD Cowen upped their price target on shares of Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the stock a “hold” rating in a research note on Friday, July 17th. Susquehanna increased 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. DA Davidson reaffirmed a “buy” rating and issued a $500.00 price target on shares of Taiwan Semiconductor Manufacturing in a report on Friday, October 16th. Needham & Company LLC raised their target price on Taiwan Semiconductor Manufacturing from $530.00 to $560.00 and gave the stock a “buy” rating in a research report on Thursday, October 15th. Finally, Zacks Research upgraded Taiwan Semiconductor Manufacturing from a “hold” rating to a “strong-buy” rating in a research report on Thursday, July 16th. Three equities research analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat, Taiwan Semiconductor Manufacturing has a consensus rating of “Buy” and an average target price of $533.89.

Taiwan Semiconductor Manufacturing Price Performance

The stock has a market cap of $1.95 trillion, a price-to-earnings ratio of 24.14, a price-to-earnings-growth ratio of 0.80 and a beta of 1.44. 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 50-day simple moving average of $431.68 and a two-hundred day simple moving average of $400.77.

Taiwan Semiconductor Manufacturing (NYSE:TSM) last issued its earnings results on Thursday, October 15th. The semiconductor company reported $4.60 EPS for the quarter, topping the consensus estimate of $4.45 by $0.15. The company had revenue of $46.72 billion during the quarter, compared to the consensus estimate of $45.67 billion. Taiwan Semiconductor Manufacturing had a return on equity of 42.84% and a net margin of 51.51%. The firm’s revenue for the quarter was up 41.2% compared to the same quarter last year. During the same period in the previous year, the company posted $2.92 EPS. As a group, equities research analysts forecast that Taiwan Semiconductor Manufacturing Company Ltd. will post 17.07 EPS for the current year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, January 7th. Shareholders of record on Thursday, December 10th will be given a dividend of $1.0854 per share. This is a decrease from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $1.1136. This represents a $4.34 annualized dividend and a yield of 1.2%. The ex-dividend date is Thursday, December 10th. Taiwan Semiconductor Manufacturing’s dividend payout ratio (DPR) is presently 22.27%.

Insiders Place Their Bets

In other Taiwan Semiconductor Manufacturing news, VP Lipen Yuan bought 1,000 shares of the stock in a transaction on Sunday, November 1st. The stock was purchased at an average price of $71.49 per share, with a total value of $71,490.00. Following the completion of the purchase, the vice president owned 8,000 shares in the company, valued at $571,920. The trade was a 14.29% increase in their ownership of the stock. The purchase was disclosed in a filing with the SEC, which is available through the SEC website. Insiders bought 5,428 shares of company stock valued at $411,021 over the last quarter. Company insiders own 1.11% of the company’s stock.

Hedge Funds Weigh In On Taiwan Semiconductor Manufacturing

Large investors have recently bought and sold shares of the company. Tiger Global Management LLC boosted its holdings in shares of Taiwan Semiconductor Manufacturing by 49.4% in 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 purchasing an additional 1,839,600 shares during the period. Fundsmith LLP bought a new position in shares of Taiwan Semiconductor Manufacturing during the 2nd quarter valued at approximately $548,465,000. Assenagon Asset Management S.A. purchased a new stake in Taiwan Semiconductor Manufacturing during the 2nd quarter valued at $490,461,000. Mirae Asset Global Investments Co. Ltd. purchased a new stake in Taiwan Semiconductor Manufacturing during the 3rd quarter valued at $444,923,000. Finally, Aberdeen Group plc lifted its position in Taiwan Semiconductor Manufacturing by 449.6% in the third quarter. Aberdeen Group plc now owns 642,465 shares of the semiconductor company’s stock worth $293,086,000 after buying an additional 525,566 shares during the last quarter. 16.51% of the stock is currently owned by institutional investors.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company (TSMC) is a semiconductor foundry that manufactures chips designed by other companies. It provides wafer fabrication and related services, including advanced packaging, serving customers across industries such as computing, communications, automotive and consumer electronics.

Founded in 1987 and headquartered in Hsinchu, Taiwan, TSMC helped establish the dedicated foundry model, in which a manufacturer focuses on producing semiconductors for customers rather than selling its own chip designs.