Taiwan Semiconductor Manufacturing (NYSE:TSM) Shares Down 6.2% – Should You Sell?

Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) shares dropped 6.2% during trading on Friday. The company traded as low as $400.12 and last traded at $405.05. Approximately 21,649,300 shares traded hands during mid-day trading, an increase of 66% from the average session volume of 13,038,793 shares. The stock had previously closed at $431.81.

Key Headlines Impacting Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: TSMC continues to benefit from its position as the world’s leading advanced-chip foundry. Its revenue has consistently exceeded Applied Materials’ over the past eight quarters and has shown a steadier upward trend, supporting the view that demand for leading-edge processors remains strong. Applied Materials vs. Taiwan Semiconductor Manufacturing
• Positive Sentiment: Long-term investor articles continue to identify TSMC as a potential multibagger because of its exposure to AI accelerators, advanced manufacturing and sustained customer demand. The thesis assumes that earnings and cash flow can continue compounding through 2030. What a $10,000 Investment in TSMC Stock Will Be Worth by 2030
• Positive Sentiment: Bell Global Equities Fund continues to hold TSMC, indicating that an institutional investor views the company’s scale, technology leadership and AI exposure as attractive despite the recent volatility. Why Bell Global Equities Fund Continues to Favor TSMC
• Positive Sentiment: Taiwan’s semiconductor industry supports a government review of potentially restarting nuclear power plants. Improved electricity availability and reliability could help address one of TSMC’s key operational risks as chip-fabrication capacity expands. Taiwan Semiconductor Industry Group Backs Nuclear Power Review
• Neutral Sentiment: TSMC remains one of the most closely watched semiconductor stocks, reflecting strong investor interest but also heightened sensitivity to earnings expectations, valuation and news affecting the AI supply chain. TSMC Is Attracting Investor Attention
• Negative Sentiment: Investors are increasingly considering whether AI spending could slow in 2027. A deceleration would pressure the semiconductor sector, although TSMC may hold up better than companies with less differentiated positions because it controls a critical manufacturing bottleneck. If AI Spending Slows in 2027
• Negative Sentiment: Bearish commentary argues that TSMC is spending heavily to defend its lead, raising concerns about capital intensity, execution and whether future returns will justify the investment. Those concerns may be contributing to pressure on the shares after their strong run. TSMC: Spending Its Lead to Keep It

Wall Street Analysts Forecast Growth

Several research analysts have recently weighed in on TSM shares. TD Cowen lifted their price objective on Taiwan Semiconductor Manufacturing from $400.00 to $440.00 and gave the stock a “hold” rating in a research report on Friday, July 17th. Stifel Nicolaus initiated coverage on shares of Taiwan Semiconductor Manufacturing in a research report on Tuesday, September 1st. They set a “buy” rating and a $515.00 target price for the company. Zacks Research raised Taiwan Semiconductor Manufacturing from a “hold” rating to a “strong-buy” rating in a report on Thursday, July 16th. Citigroup restated a “buy” rating on shares of Taiwan Semiconductor Manufacturing in a research report on Wednesday, October 7th. Finally, Needham & Company LLC increased their price target on shares of Taiwan Semiconductor Manufacturing from $530.00 to $560.00 and gave the stock a “buy” rating in a report on Thursday, October 15th. Three equities research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating and one has issued a Hold rating to the stock. Based on data from MarketBeat, Taiwan Semiconductor Manufacturing currently has a consensus rating of “Buy” and a consensus target price of $528.78.

Taiwan Semiconductor Manufacturing Stock Down 6.2%

The company has a 50-day moving average of $435.22 and a two-hundred day moving average of $399.12. The company has a market capitalization of $2.10 trillion, a P/E ratio of 26.07, a price-to-earnings-growth ratio of 0.89 and a beta of 1.37. The company has a quick ratio of 2.25, a current ratio of 2.46 and a debt-to-equity ratio of 0.14.

Taiwan Semiconductor Manufacturing (NYSE:TSM) last posted its quarterly earnings data on Thursday, October 15th. The semiconductor company reported $4.60 earnings per share for the quarter, beating analysts’ consensus estimates of $4.45 by $0.15. The company had revenue of $46.72 billion during the quarter, compared to analyst estimates 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% on a year-over-year basis. During the same quarter last year, the company earned $2.92 EPS. On average, research analysts predict that Taiwan Semiconductor Manufacturing Company Ltd. will post 17.07 EPS for the current year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The firm also recently declared a quarterly dividend, which will be paid on Thursday, January 7th. Stockholders of record on Thursday, December 10th will be given a dividend of $1.0854 per share. This represents a $4.34 annualized dividend and a dividend yield of 1.1%. The ex-dividend date of this dividend is Thursday, December 10th. This is a decrease from Taiwan Semiconductor Manufacturing’s previous quarterly dividend of $1.1136. Taiwan Semiconductor Manufacturing’s payout ratio is currently 22.07%.

Insider Buying and Selling

In other Taiwan Semiconductor Manufacturing news, VP Bor-Zen Tien purchased 1,000 shares of Taiwan Semiconductor Manufacturing stock in a transaction that occurred on Monday, August 3rd. The shares were bought at an average price of $73.06 per share, for a total transaction of $73,060.00. Following the completion of the transaction, the vice president owned 14,051 shares of the company’s stock, valued at approximately $1,026,566.06. This trade represents a 7.66% increase in their position. The acquisition was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, VP Lipen Yuan acquired 350 shares of the business’s stock in a transaction on Tuesday, August 18th. The shares were purchased at an average price of $73.58 per share, for a total transaction of $25,753.00. Following the transaction, 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. Additional details regarding this purchase are available in the official SEC disclosure. In the last 90 days, insiders have acquired 7,043 shares of company stock worth $530,986. 1.11% of the stock is owned by company insiders.

Institutional Investors Weigh In On Taiwan Semiconductor Manufacturing

Large investors have recently added to or reduced their stakes in the stock. Third View Private Wealth LLC boosted its holdings in shares of Taiwan Semiconductor Manufacturing by 21.9% in the 3rd quarter. Third View Private Wealth LLC now owns 16,808 shares of the semiconductor company’s stock valued at $7,668,000 after buying an additional 3,016 shares in the last quarter. Provenance Wealth Advisors LLC grew its position in Taiwan Semiconductor Manufacturing by 507.0% during the third quarter. Provenance Wealth Advisors LLC now owns 12,777 shares of the semiconductor company’s stock valued at $5,829,000 after buying an additional 10,672 shares during the period. RFG Holdings Inc. raised its stake in shares of Taiwan Semiconductor Manufacturing by 1.8% during the 3rd quarter. RFG Holdings Inc. now owns 6,656 shares of the semiconductor company’s stock worth $3,037,000 after buying an additional 119 shares during the period. Associated Banc Corp purchased a new position in Taiwan Semiconductor Manufacturing in the 3rd quarter valued at about $217,000. Finally, TT International Asset Management LTD boosted its stake in Taiwan Semiconductor Manufacturing by 28.4% during the 3rd quarter. TT International Asset Management LTD now owns 283,094 shares of the semiconductor company’s stock worth $129,145,000 after purchasing an additional 62,687 shares during the last quarter. 16.51% of the stock is owned by hedge funds and other institutional investors.

About Taiwan Semiconductor Manufacturing

Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), commonly known as TSMC, is a dedicated semiconductor foundry headquartered in Hsinchu, Taiwan. The company manufactures integrated circuits for customers that design their own chips, allowing semiconductor, electronics, and technology companies to outsource production rather than operate their own fabrication facilities.

TSMC provides wafer fabrication services across a broad range of process technologies, including advanced nodes used in high-performance computing, smartphones, automotive systems, and artificial intelligence applications.