tsmc stock dips amid ai uncertainty: analysts warn 'it's not over'

2025-02-25 tsmc

Taipei, Tuesday, 25 February 2025.
tsmc’s stock briefly touched nt$1050, a new yearly low, amidst growing worries about ai demand. analysts caution that the decline may not be over, citing microsoft’s potential scaling back of ai infrastructure investments and nvidia’s upcoming earnings report as factors. the stock’s fall below key support levels has triggered a ‘battle to defend’ a critical price point. experts suggest investors watch the nt$1000 level as a crucial support.

market reaction to tsmc’s decline

the taiwan stock market felt the impact as tsmc’s stock price declined [2][3][4]. on monday, the broader taiwan stock market opened lower, mirroring a steep drop in u.s. equities on february 21 [3][4]. the taiwan stock market index plummeted to 23461.43 points before experiencing a slight recovery [3][4]. tsmc’s stock traded at nt$1075, a decrease of nt$20 [3][4]. other major stocks also saw declines, including hon hai, mediatek, and quanta [3][4]. the electronics sector decreased by 1.2%, and financial stocks fell by about 0.45% [3][4].

analyst perspectives on ai demand and tsmc

senior taiwan stock analyst hsu po-chieh noted that tsmc’s taiwan-listed shares have fallen below levels seen since the post-lunar new year opening on february 3 and the u.s. tariff concerns on february 14 [1]. this indicates significant short-term selling pressure [1]. a td cowen report suggested microsoft might be reducing investments in ai computing power, contributing to market worries [1]. nvidia’s impending earnings report also prompts some investors to reduce holdings to mitigate risk [1]. hsu po-chieh stressed that the nt$1000 level is a crucial support price [1].

geopolitical factors and potential impact

geopolitical tensions, particularly u.s. policy regarding chip tariffs, add another layer of uncertainty [1]. a u.s. media outlet suggested that the u.s. administration’s pressure on tsmc to transfer technology could be excessive [7]. trump’s proposal of a 25% tariff on chips has prompted some manufacturers to consider returning to the u.s [7]. these factors, combined with existing concerns about ai demand, create a complex environment for tsmc and its investors [alert! ‘the specific details of trump’s tariff policies and their implementation remain uncertain’] [7].

tsmc’s market position and future outlook

despite short-term volatility, analysts believe tsmc’s long-term growth trajectory remains intact [1]. the company is currently engaged in a ‘battle to defend’ its six-month moving average [1]. projections estimate tsmc’s 2024 earnings per share (eps) to be between nt$59 and nt$60 [1]. should the stock price approach nt$1000, it may attract bargain-hunting investors [1]. the longer-term outlook hinges on developments in ai demand and the specifics of any u.s. chip tariff policies [1].

Bronnen

Stock decline AI demand