TLDR
- TSM fell more than 6% on Wednesday as investors rotated out of tech, with the Nasdaq down 0.87% while financials and communication services led gains.
- Despite the drop, TSM remains above its 20, 50, and 200-day moving averages, and its RSI of 54.34 puts it in neutral territory.
- Wall Street expects TSM earnings of $3.77 per share on revenue of $39.76 billion when it reports on July 16, up sharply from a year ago.
- Analysts maintain a consensus Buy rating with an average price target of $489.17; Bank of America has a target of $590 and Susquehanna set a target of $575.
- Two TSM vice presidents bought a combined $155,830 worth of stock in late June, signaling internal confidence even as the stock pulled back.
Taiwan Semiconductor Manufacturing (TSM) dropped more than 6% on Wednesday, closing around $446.87, as a broad rotation out of tech put pressure on chip stocks across the board.
Taiwan Semiconductor Manufacturing Company Limited, TSM
The tech sector was the worst-performing area of the S&P 500 on the day, falling 1.7%. Meanwhile, eight of the 11 S&P 500 sectors finished in the green, with financials up 2.64% and communication services up 2.61%. The Nasdaq slid 0.87%, while the S&P 500 managed a 0.34% gain.
TSM actually fell harder than the broader tech sector, underperforming on a day already tough for semiconductor names. The move was seen more as profit-taking after a strong first half than a signal of anything wrong with the business.
The stock hit a 52-week high in June, so a pullback like this fits the pattern.
Technical Picture Still Bullish
Even after Wednesday’s decline, TSM’s technical setup remains intact. The stock is trading 2.4% above its 20-day moving average of $438.02, 7.3% above its 50-day at $418.27, and a full 30.8% above its 200-day at $343.18.
The 20-day is above the 50-day, and the 50-day is above the 200-day — a classic bullish stacking formation.
The RSI sits at 54.34, which is neutral. That means neither overbought nor oversold, just a stock catching its breath.
Key resistance is near $450, with support around $405.50.
Earnings and Analyst Targets
The next big event for TSM investors is the July 16 earnings report. Wall Street is looking for $3.77 per share in earnings, up from $2.47 a year ago, on revenue of $39.76 billion versus $30.07 billion in the prior year period.
Analysts aren’t shy about the stock. The consensus is a Buy, with an average price target of $489.17. Bank of America recently raised its target to $590, and Susquehanna lifted theirs to $575.
TSM trades at about 41.5 times earnings, a premium valuation that reflects its role in AI chip production.
One detail worth noting: two company vice presidents bought stock in late June. VP Bor-Zen Tien picked up 1,000 units at $76.64, and VP Lipen Yuan bought another 1,000 at $79.19. That’s roughly $155,830 in insider buying within a week.
TSMC also raised its quarterly dividend to $1.1136 from $0.95, payable in October.
Trust Investment Advisors trimmed its stake by 9.5% in Q1, but that was before the stock’s strong second-quarter run. Multiple other institutional investors added to positions during that same period, including Brighton Jones, Bank of Nova Scotia, and FWL Investment Management.
The stock has a 12-month low of $223.70 and reached a high of $479.00, reflecting how far it has come over the past year.
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