Taiwan Semiconductor Manufacturing Co (ADR) (NYSE:TSM) shares dropped 1.8% after the company warned that first-quarter revenue would be at the lower end of its forecast due to a $161 million hit from a January earthquake in Taiwan. The world's largest contract chipmaker, which supplies Apple and Nvidia, said the quake led to wafer losses but did not cause structural damage to its factories.
TSMC , the world's biggest contract chipmaker, said on Monday its first-quarter revenue would be closer to the lower end of its guidance, as it expects a $161 million impact from an earthquake that rocked the island in January.
The last few days have been quite challenging for the semiconductor industry. The news of Chinese start-up DeepSeek releasing its open-source AI model DeepSeek-R1 -- which it says cost less than $6 million to create -- has triggered concerns about drastic declines in AI spending.
Few companies have as strong a growth trajectory as Taiwan Semiconductor Manufacturing (TSM 0.56%). TSMC, as it's also known, is the world's largest contract chip manufacturer, which means that it acts as a fabrication company for those who do not have the capabilities to produce chips themselves.
There is no shortage of artificial intelligence (AI) stocks that have trounced the market over the past few years. Even after a recent tech stock decline, brought on by rising competition from a cheaper AI model created by China-based DeepSeek, many AI stocks are still easily outpacing the market.
Chip stocks got hit hard on Monday in response to the launch of the Chinese artificial intelligence (AI) chatbot DeepSeek. Several major AI stocks saw double-digit, one-day losses.
Taiwan Semiconductor Manufacturing Company Limited slumped despite strong quarterly results due to news of a Chinese AI company producing a more efficient AI model, which should boost AI chip demand. AI chip demand remains insatiable, with tech giants like Meta Platforms and Microsoft planning massive capital expenditures on AI infrastructure. TSM stock is undervalued, trading at only 19x forward earnings, with higher growth prospects than other stocks hyped due to AI.
Rob Sechan, CEO of NewEdge Wealth, joins CNBC's "Halftime Report" to explain why he's buying more Taiwan Semi here.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
TSMC (TSM) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
While taking everything a management team says at face value can be an investing error, checking its historical predictions against actual results is a good way to start trusting what management says. Of course, this isn't possible with new management teams, but those that have been in place for some time are easier to trust.
Despite recent fears and a 13% stock drop, I believe TSMC's AI demand and long-term growth prospects remain strong, making it a solid investment. TSMC's Q4 2024 results were impressive, with revenue up 38.8% YoY and EPS up 57% YoY, reinforcing its robust financial health. Key 2025 highlights include Arizona Fab 21's volume production, early N2 node production, strong N3 smartphone demands and full capacity utilization, which support TSMC's growth trajectory.