Taiwan Semiconductor Manufacturing (NYSE:TSM) Stock Falls 4.5% – What’s Next?

Shares of Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM) traded down 4.5% during trading on Thursday. The company traded as low as $410.22 and last traded at $412.3510. 16,306,243 shares traded hands during trading, an increase of 25% from the average session volume of 13,097,141 shares. The stock had previously closed at $431.89.

Trending Headlines about Taiwan Semiconductor Manufacturing

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

• Positive Sentiment: Moody’s upgraded TSMC’s issuer rating to Aa2 from Aa3, citing its dominant foundry position, robust balance sheet and sustained AI-related demand. The stable outlook and upgraded ratings for financing subsidiaries could lower perceived credit risk. Moody’s upgrades TSMC rating
• Positive Sentiment: TSMC reported its sixth consecutive quarter of record profit, while management raised its full-year growth outlook for the third time. Analysts at Erste Group also increased their FY2026 EPS estimate to $17.21 from $16.92 and FY2027 forecast to $22.82 from $22.26, above the current consensus for the current year. TSMC record profit and market concerns
• Positive Sentiment: Investors continue to view TSMC as a critical supplier for AI accelerators, smartphones and data centers. Its advanced-node manufacturing, packaging capabilities and broad customer base reinforce the company’s competitive position as AI infrastructure spending expands. TSMC as a global computing utility
• Positive Sentiment: TSMC confirmed discussions with SpaceX regarding its proposed Terafab facility. Any agreement could provide additional long-term capacity demand, although the company reportedly wants operational control of the fab. TSMC and SpaceX Terafab discussions
• Neutral Sentiment: TSMC’s results demonstrate powerful demand, but comparisons with ASML highlight a key constraint: AI orders exceed currently available semiconductor manufacturing equipment, fab capacity and advanced packaging. The pace and cost of expanding supply remain important investment questions. ASML versus TSMC and AI demand
• Negative Sentiment: Despite record earnings, a slight decline in gross margin unsettled some investors. The reaction reflects concerns that higher overseas expansion costs, capacity investments or product mix could pressure profitability even while revenue and AI demand remain strong. TSMC margin concerns

Analyst Ratings Changes

TSM has been the subject of several analyst reports. Barclays increased their price objective on shares of Taiwan Semiconductor Manufacturing from $665.00 to $670.00 and gave the company an “overweight” rating in a research note on Friday, October 16th. Susquehanna upped their target price on shares of Taiwan Semiconductor Manufacturing from $575.00 to $600.00 and gave the stock a “positive” rating in a report on Thursday, July 16th. Needham & Company LLC boosted their price target on shares of Taiwan Semiconductor Manufacturing from $530.00 to $560.00 and gave the stock a “buy” rating in a research note on Thursday, October 15th. Stifel Nicolaus began coverage on Taiwan Semiconductor Manufacturing in a research note on Tuesday, September 1st. They issued a “buy” rating and a $515.00 target price for the company. Finally, Weiss Ratings upgraded Taiwan Semiconductor Manufacturing from a “hold (c+)” rating to a “buy (b)” rating in a report on Wednesday. Three equities research analysts have rated the stock with a Strong Buy rating, twelve have given a Buy rating and one has given a Hold rating to the company’s stock. According to data from MarketBeat, the company has a consensus rating of “Buy” and an average target price of $528.78.

Taiwan Semiconductor Manufacturing Trading Up 1.3%

The stock has a market cap of $2.17 trillion, a P/E ratio of 26.88, a P/E/G ratio of 0.84 and a beta of 1.37. The company has a debt-to-equity ratio of 0.14, a current ratio of 2.46 and a quick ratio of 2.25. The firm’s 50 day moving average price is $434.30 and its 200-day moving average price is $420.15.

Taiwan Semiconductor Manufacturing (NYSE:TSM) last released its quarterly earnings data on Tuesday, September 8th. The semiconductor company reported $4.62 EPS for the quarter. The company had revenue of $46.87 billion during the quarter. Taiwan Semiconductor Manufacturing had a return on equity of 42.84% and a net margin of 51.51%. As a group, equities research analysts forecast that Taiwan Semiconductor Manufacturing Company Ltd. will post 17.07 earnings per share for the current year.

Taiwan Semiconductor Manufacturing Cuts Dividend

The company also recently announced a quarterly dividend, which will be paid on Thursday, January 7th. Investors of record on Thursday, December 10th will be issued a $1.0854 dividend. The ex-dividend date of this dividend is Thursday, December 10th. This represents a $4.34 annualized dividend and a yield of 1.0%. This is a negative change 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 news, VP Bor-Zen Tien purchased 1,000 shares of the business’s stock in a transaction on Monday, August 3rd. The stock was acquired at an average price of $73.06 per share, for a total transaction of $73,060.00. Following the acquisition, the vice president directly owned 14,051 shares of the company’s stock, valued at $1,026,566.06. This represents a 7.66% increase in their position. The acquisition was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, VP Lipen Yuan purchased 1,000 shares of the stock in a transaction that occurred on Tuesday, August 18th. The stock was acquired at an average cost of $74.50 per share, with a total value of $74,500.00. Following the acquisition, the vice president owned 6,000 shares in the company, valued at $447,000. The trade was a 20.00% increase in their position. The disclosure for this purchase is available in the SEC filing. Over the last quarter, insiders acquired 8,043 shares of company stock valued at $598,956. Company insiders own 1.11% of the company’s stock.

Hedge Funds Weigh In On Taiwan Semiconductor Manufacturing

Hedge funds have recently added to or reduced their stakes in the company. Tiger Global Management LLC increased its stake in shares of Taiwan Semiconductor Manufacturing by 49.4% in the first quarter. Tiger Global Management LLC now owns 5,565,074 shares of the semiconductor company’s stock worth $1,880,717,000 after acquiring an additional 1,839,600 shares during the last quarter. Sei Investments Co. increased its stake in shares of Taiwan Semiconductor Manufacturing by 11.8% in the first quarter. Sei Investments Co. now owns 2,591,510 shares of the semiconductor company’s stock worth $875,802,000 after purchasing an additional 274,389 shares during the period. Assenagon Asset Management S.A. increased its position in Taiwan Semiconductor Manufacturing by 67.2% in the 3rd quarter. Assenagon Asset Management S.A. now owns 1,717,515 shares of the semiconductor company’s stock worth $783,513,000 after buying an additional 690,523 shares during the period. Bessemer Group Inc. boosted its holdings in Taiwan Semiconductor Manufacturing by 7.9% in the 1st quarter. Bessemer Group Inc. now owns 1,781,764 shares of the semiconductor company’s stock valued at $602,147,000 after purchasing an additional 130,602 shares during the period. Finally, AMF Tjanstepension AB lifted its holdings in shares of Taiwan Semiconductor Manufacturing by 6.4% during the 1st quarter. AMF Tjanstepension AB now owns 1,632,738 shares of the semiconductor company’s stock worth $551,784,000 after acquiring an additional 98,123 shares during the period. 16.51% of the stock is currently owned by institutional investors.

Taiwan Semiconductor Manufacturing Company Profile

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.