Taiwan Semiconductor Manufacturing (NYSE:TSM) Shares Down 1.8% – Time to Sell?

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM)’s share price traded down 1.8% during trading on Thursday. The stock traded as low as $407.13 and last traded at $422.15. Approximately 22,281,890 shares were traded during mid-day trading, an increase of 70% from the average daily volume of 13,080,546 shares. The stock had previously closed at $430.00.

Key Taiwan Semiconductor Manufacturing News

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

• Positive Sentiment: Record results and strong guidance support the long-term outlook. Third-quarter net income rose 68.7% year over year to NT$763.1 billion, while revenue increased about 51% and exceeded analyst estimates. TSMC also forecast fourth-quarter revenue of $52.3 billion to $54.3 billion, well above the consensus estimate. TSMC posts record profit for a sixth straight quarter
• Positive Sentiment: AI demand remains the key growth driver. Advanced technologies represented 79% of wafer revenue, and management reported no signs of a slowdown in demand for AI and high-performance-computing chips. Full-year 2026 revenue growth is expected to be approximately 44%, while annual 2-nanometer capacity is projected to more than double in 2027. Three key takeaways for long-term investors
• Positive Sentiment: Analysts remain bullish. DA Davidson reaffirmed its Buy rating with a $500 target, while Needham raised its target to $560. Articles also highlight TSMC’s manufacturing scale and competitive moat as potential benefits from continued AI infrastructure investment. TSMC long-term investment outlook
• Neutral Sentiment: Capacity expansion is both an opportunity and a concern. TSMC is considering additional U.S. expansion, including potential involvement in Elon Musk’s proposed Texas “Terafab,” while Taiwan is planning Texas industrial parks for Nvidia suppliers. These projects could improve customer access and supply-chain resilience but increase execution and investment requirements. TSMC talks with Elon Musk’s Terafab
• Negative Sentiment: Large capital expenditures are weighing on sentiment. TSMC’s roughly $64 billion spending plan has prompted questions about returns, potential overcapacity and whether AI demand can justify the industry’s investment pace. Investors also remain concerned about AI companies’ debt financing and profitability. Why TSMC’s spending plan concerns investors
• Negative Sentiment: Sector-wide risk aversion is overpowering the earnings beat. Chip stocks are selling off amid inflation, higher interest rates, concerns about AI financing and questions about whether the AI boom has already been priced into valuations. Commentary also notes that TSMC’s strong results may have raised expectations too high. Chip stocks tumble on AI investment worries

Analyst Ratings Changes

TSM has been the subject of several research reports. 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 objective for the company. Wall Street Zen cut shares of Taiwan Semiconductor Manufacturing from a “strong-buy” rating to a “buy” rating in a research note on Saturday, August 8th. DA Davidson reiterated a “buy” rating and issued a $500.00 target price on shares of Taiwan Semiconductor Manufacturing in a report on Friday. Weiss Ratings lowered shares of Taiwan Semiconductor Manufacturing from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, October 6th. Finally, Zacks Research upgraded shares of Taiwan Semiconductor Manufacturing from a “hold” rating to a “strong-buy” rating in a report on Thursday, July 16th. Three investment analysts have rated the stock with a Strong Buy rating, eleven have given a Buy rating and two have issued a Hold rating to the company’s stock. According to MarketBeat, Taiwan Semiconductor Manufacturing currently has a consensus rating of “Buy” and an average price target of $528.78.

Taiwan Semiconductor Manufacturing Stock Down 2.2%

The stock has a fifty day moving average of $434.71 and a 200-day moving average of $417.11. The firm has a market capitalization of $2.14 trillion, a price-to-earnings ratio of 26.59, a PEG ratio of 0.87 and a beta of 1.37. The company has a current ratio of 2.46, a quick ratio of 2.25 and a debt-to-equity ratio of 0.14.

Taiwan Semiconductor Manufacturing (NYSE:TSM) last announced its earnings results on Tuesday, September 8th. The semiconductor company reported $4.62 EPS for the quarter. Taiwan Semiconductor Manufacturing had a return on equity of 42.84% and a net margin of 51.51%. The business had revenue of $46.87 billion during the quarter. As a group, sell-side analysts expect that Taiwan Semiconductor Manufacturing Company Ltd. will post 16.65 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 paid a dividend of $1.0854 per share. 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 1.1%. The ex-dividend date of this dividend is Thursday, December 10th. Taiwan Semiconductor Manufacturing’s payout ratio is currently 24.96%.

Insiders Place Their Bets

In other news, VP Bor-Zen Tien bought 3,000 shares of the firm’s stock in a transaction on Tuesday, July 21st. The stock was bought at an average cost of $74.39 per share, for a total transaction of $223,170.00. Following the completion of the acquisition, the vice president directly owned 4,000 shares in the company, valued at $297,560. This represents a 300.00% increase in their position. The purchase was disclosed in a filing with the SEC, which is available at this hyperlink. Also, VP Lipen Yuan bought 1,000 shares of the company’s stock in a transaction dated Tuesday, August 18th. The stock was purchased at an average cost of $74.50 per share, for a total transaction of $74,500.00. Following the completion of the transaction, the vice president owned 6,000 shares of the company’s stock, valued at $447,000. This represents a 20.00% increase in their ownership of the stock. Additional details regarding this purchase are available in the official SEC disclosure. Insiders bought a total of 16,043 shares of company stock worth $1,185,746 over the last ninety days. 1.11% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Taiwan Semiconductor Manufacturing

Several institutional investors and hedge funds have recently added to or reduced their stakes in the company. Tiger Global Management LLC grew its holdings in shares of Taiwan Semiconductor Manufacturing by 49.4% during the first quarter. Tiger Global Management LLC now owns 5,565,074 shares of the semiconductor company’s stock valued at $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% during the 4th quarter. Invesco Ltd. now owns 3,721,823 shares of the semiconductor company’s stock worth $1,131,025,000 after acquiring an additional 40,842 shares during the period. Sei Investments Co. boosted its position in Taiwan Semiconductor Manufacturing by 11.8% during the 1st 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 during the period. Assenagon Asset Management S.A. grew its stake in Taiwan Semiconductor Manufacturing by 67.2% during the 3rd quarter. Assenagon Asset Management S.A. now owns 1,717,515 shares of the semiconductor company’s stock valued at $783,513,000 after acquiring an additional 690,523 shares in the last quarter. Finally, T. Rowe Price Investment Management Inc. grew its stake in Taiwan Semiconductor Manufacturing by 168.6% during the 4th 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 acquiring an additional 1,313,917 shares in the last quarter. 16.51% of the stock is currently 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.