TSMC’s Stock Moves Positive YoY, Bearish Signals Remain

Taiwan Semiconductor Manufacturing Company (NYSE: TSM), commonly known as TSMC, is experiencing a significant slump in its stock performance through early 2025. The TSM stock price has fallen more than 30% since reaching its 52-week high in January, even when allowing for yesterday's 12.29% bounce.

This position is not unique to TSMC, with many in the sector impacted by negative market sentiment, influenced in significant part by tariffs imposed by the Trump administration. The rally off yesterday's intraday low of $137.90 has brought the stock back into positive territory over the past 12 months, with gains of 8.57% telling only part of the tale in what had been a huge growth story.

Despite this downturn, TSMC's business remains solid. The company's revenue for the first two months of 2025 saw an impressive 39% increase compared to the same period in the previous year. Furthermore, projected revenue of $25.4 billion for the first quarter of 2025 represents a 34% year-over-year increase.

Analysts also anticipate a substantial 49% growth in earnings for the same quarter, estimating earnings per share of $2.05, largely fueled by a surge in demand for artificial intelligence (AI) chips.

TSMC's role as a key supplier for Nvidia's Blackwell AI GPUs underscores its prominence in the semiconductor industry. The company is actively expanding its capacity to cater to this increasing demand. TSMC is also investing in additional facilities to handle the rising volume of packaging module shipments, which are growing at a rate of 20% per quarter. These strategic moves are part of TSMC's broader plan to achieve a 20% compound annual growth rate (CAGR) in revenue over the next five years.

Down 1.64% in this morning's pre-market, after a 12%+ gain on Wednesday tells only part of the volatility story. Recent news that the company could be set to be fined $1 billion in order to settle a U.S. export control investigation could yet cause some ripples if confirmed.

With the stock trading significantly below both 50 day, and 200 Day simple moving averages, TSMC remains in a downtrend. Earnings in the next week could well provide some fundamental support for the bulls, but with much remaining uncertain, guidance may be more of interest.