Taiwan Semiconductor Manufacturing (NYSE:TSM) Shares Down 3% – Time to Sell?

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM)’s share price dropped 3% on Thursday. The stock traded as low as $452.88 and last traded at $457.9350. Approximately 13,092,649 shares changed hands 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 Headlines Impacting Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: Record quarterly revenue beat expectations. TSMC reported third-quarter revenue of approximately NT$1.494 trillion, up 50.9% year over year and about 3% above both Wedbush’s estimate and market consensus. September sales rose 54.6% year over year to NT$511.86 billion, reinforcing that demand for advanced AI chips remains robust. TSMC’s third-quarter revenue surges to record, beating market forecast
• Positive Sentiment: AI infrastructure demand continues to support growth. Strong orders from customers such as Nvidia and AMD are driving demand for TSMC’s leading-edge manufacturing and advanced packaging capacity. The results provide a positive read-through for the broader AI semiconductor market. TSMC September sales hit another record as AI boom rolls on
• Positive Sentiment: U.S. packaging capacity is expanding. TSMC agreed to a multiyear, $2 billion manufacturing arrangement with GlobalFoundries to establish a U.S. supply of silicon interposers for TSMC’s CoWoS advanced-packaging ecosystem. The deal could improve supply-chain resilience for high-performance computing and AI systems, although production is not expected to ramp until the first half of 2028. GlobalFoundries Lands $2 Billion TSMC Deal to Expand US AI Chip Packaging
• Neutral Sentiment: Insider buying offers a modest confidence signal. CEO C.C. Wei, the CFO and other senior executives reported small open-market purchases. The transactions are directionally positive but relatively limited compared with TSMC’s market capitalization.
• Negative Sentiment: Macro conditions are overshadowing the earnings beat. Rising oil prices and Treasury yields pressured technology stocks and reduced investor appetite for high-valuation growth companies. TSMC’s strong results may also have been largely anticipated after its recent rally.
• Negative Sentiment: Expectations are becoming harder to exceed. With TSMC trading near its 52-week high and at a premium valuation, investors may be looking for stronger guidance on capital spending, capacity expansion and future AI demand when the full earnings report arrives.

Wall Street Analyst Weigh In

A number of research firms recently commented on TSM. Needham & Company LLC raised 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 note on Monday, July 27th. Barclays increased their target price on Taiwan Semiconductor Manufacturing from $650.00 to $665.00 and gave the company an “overweight” rating in a report on Tuesday. Stifel Nicolaus started coverage on Taiwan Semiconductor Manufacturing in a report on Tuesday, September 1st. They set a “buy” rating and a $515.00 price target on the stock. TD Cowen upped their price target on Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the company a “hold” rating in a research report on Friday, July 17th. Finally, Weiss Ratings downgraded Taiwan Semiconductor Manufacturing from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday. Three investment analysts have rated the stock with a Strong Buy rating, eleven have issued a Buy rating and two have given a Hold rating to the stock. According to data from MarketBeat, the company currently has an average rating of “Buy” and an average target price of $524.89.

Taiwan Semiconductor Manufacturing Trading Down 3.0%

The business’s 50-day simple moving average is $431.08 and its 200-day simple moving average is $412.62. The company has a market cap of $2.38 trillion, a PE ratio of 33.04, a P/E/G ratio of 1.07 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 posted its quarterly earnings results on Tuesday, June 30th. The semiconductor company reported $4.28 EPS for the quarter. Taiwan Semiconductor Manufacturing had a net margin of 50.31% and a return on equity of 39.25%. The business had revenue of $39.89 billion for the quarter. As a group, analysts expect that Taiwan Semiconductor Manufacturing Company Ltd. will post 16.56 EPS for the current fiscal year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The company also recently announced 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 represents a $4.34 dividend on an annualized basis and a yield of 0.9%. This is a decrease from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $1.1136. The ex-dividend date is Thursday, December 10th. Taiwan Semiconductor Manufacturing’s dividend payout ratio is presently 24.96%.

Insider Activity

In other news, VP Bor-Zen Tien purchased 1,000 shares of the stock in a transaction that occurred on Monday, August 3rd. The stock was acquired at an average price of $73.06 per share, with a total value of $73,060.00. Following the purchase, the vice president owned 14,051 shares in the company, valued at $1,026,566.06. This represents a 7.66% increase in their position. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, VP Lipen Yuan bought 350 shares of Taiwan Semiconductor Manufacturing stock in a transaction on Tuesday, August 18th. The stock was acquired at an average price of $73.58 per share, with a total value of $25,753.00. Following the completion of the purchase, the vice president directly owned 2,000 shares of the company’s stock, valued at approximately $147,160. The trade was a 21.21% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Insiders bought a total of 16,043 shares of company stock worth $1,185,746 in the last three months. 1.11% of the stock is owned by insiders.

Institutional Inflows and Outflows

Institutional investors have recently made changes to their positions in the stock. Tiger Global Management LLC raised its stake 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 valued at $1,880,717,000 after buying an additional 1,839,600 shares in the last quarter. T. Rowe Price Investment Management Inc. increased 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 acquiring an additional 1,313,917 shares during the period. Corient Private Wealth LLC increased its stake in Taiwan Semiconductor Manufacturing by 330.0% in the fourth quarter. Corient Private Wealth LLC now owns 1,583,175 shares of the semiconductor company’s stock valued at $481,111,000 after acquiring an additional 1,215,035 shares during the period. Fundsmith LLP acquired a new position in Taiwan Semiconductor Manufacturing in the second quarter worth about $548,465,000. Finally, Deutsche Bank AG raised its position in Taiwan Semiconductor Manufacturing by 94.3% in the fourth quarter. Deutsche Bank AG now owns 2,264,367 shares of the semiconductor company’s stock worth $688,118,000 after purchasing an additional 1,098,727 shares in the last quarter. 16.51% of the stock is owned by 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.