TSMC Stock Dives Over 3%, Breaking Key Technical Levels

Taiwan Semiconductor Manufacturing Company (TSMC) saw its stock price plummet more than 3% on July 17, breaking below its five-day and monthly moving averages. The sharp decline followed the company's earnings call the previous day, where its gross margin outlook fell short of market expectations.

Adding to investor concerns, TSMC announced a substantial $100 billion investment in the United States, fueling worries about the company's future free cash flow. The semiconductor giant's stock reached a low of 2375 NT dollars in early trading, before settling at 2380 NT dollars, down 3.64% as of 9:40 AM. Trading volume exceeded 20,000 shares.

Earlier, TSMC reported strong second-quarter financial results, with both its profit margins and overall profit reaching new highs. Driven by sustained high demand for artificial intelligence, the company revised its full-year revenue growth forecast upward to over 40%, from an initial projection of 30%. Capital expenditures were also significantly increased to between $60 billion and $64 billion, representing a year-over-year increase of over 50% on average.

The planned $100 billion investment in Arizona aims to build four additional wafer fabrication plants to meet the robust demand from U.S. customers for years to come. Following the earnings call, several foreign investment firms reiterated their support, with nine firms raising their price targets to over 3000 NT dollars, underscoring a general positive outlook on TSMC's medium-to-long-term growth trajectory.