tsmc's pe ratio plunges: a buying opportunity?
Taipei, Friday, 11 April 2025.
taiwan stock exchange data indicates tsmc has suffered four consecutive losses. this downturn significantly impacts its price-to-earnings ratio. the current p/e ratio is 19.08, drastically lower than the industry average of 136.53. this raises the question if tsmc is currently undervalued. investors are watching closely. a potential market correction or a strategic buying opportunity might be coming. the consecutive losses may signal a broader market shift or company-specific challenges.
recent trading data
Recent trading data shows TSMC (2330.TW) experienced a trading volume of 76,015 today, significantly higher than yesterday’s volume of 19,393 [1]. The stock opened at 848, reached a high of 889, and a low of 836, with an average price of 864 [1]. The stock closed at 863, representing a 3.01% increase, or 26.00, from the previous day [1]. Internal buying accounted for 46.64% of the volume, while external buying constituted 53.36% [1]. This surge in trading activity and price increase may indicate renewed investor interest despite earlier losses.
trump’s tariff threats
Adding to the complexities, former U.S. President Donald Trump recently threatened to impose a 100% tariff on TSMC if it doesn’t manufacture in the United States [3]. This announcement on April 8 led to a more than 3% drop in TSMC’s stock price; the stock has cumulatively fallen over 16% in the past five trading days [3]. This potential tariff could significantly impact TSMC’s profitability and global competitiveness, especially as it supplies chips to major companies like Nvidia, AMD, and Apple [3].
revenue growth amid trade tensions
Despite these challenges, TSMC reported strong revenue growth. March revenue reached 285.96 billion new taiwan dollars (ntd), a 46.5% increase compared to the 195.21 billion ntd in the same period last year [4]. This growth is spurred by robust demand for advanced chips and AI-related applications [4]. First-quarter revenue totaled 839.25 billion ntd, a 41.6 increase from 2024 [4]. This revenue surge is partially attributed to electronics manufacturers stockpiling goods in U.S. warehouses before new tariffs took effect [5].
analyst perspectives
Analysts have mixed views on TSMC’s outlook. Citi analyst Laura Chen acknowledges potential risks to TSMC’s previous guidance of over 20% year-over-year revenue growth for 2025 [6]. Chen anticipates potential weakness in smartphone and PC shipments and a slowdown in AI investments [6]. Despite these concerns, Chen maintains a “buy” rating on TSMC, citing its technological leadership [6]. However, she lowered the target price from 1,400 ntd to 1,050 ntd [6].