tsmc: is the dip a buying opportunity or a warning sign?
taipei, Tuesday, 11 March 2025.
taiwan semiconductor manufacturing company is currently trading below analyst price targets. this could signal a potential buying opportunity. however, investors should proceed with caution. the company faces bearish momentum and analysts suggest uncertainty ahead of the earnings report on april 17. tsmc’s recent close was $170.65, a 3.64% decrease. the stock’s rsi indicates it may be oversold. a discounted cash flow model suggests an intrinsic value of $22.43, far below the current price.
bearish signals and technical indicators
On March 10, 2025, TSMC’s stock experienced a 3.64% decrease, closing at $170.65 [1][2]. The trading volume of 18.16 million shares surpassed its average of 16.98 million, indicating increased selling pressure [1]. TSMC’s Relative Strength Index (RSI) stands at 26, signaling that the stock is currently in oversold territory [1]. The stock price is also trading below its 50-day and 200-day moving averages, which are $201.26 and $184.02 respectively, reinforcing the bearish trend [1]. The Moving Average Convergence Divergence (MACD) indicator is negative at -8.03, further corroborating the downward momentum [1].
revenue fluctuations and market dynamics
TSMC’s February 2025 revenue experienced a decline of 11.3% compared to January 2025 [3]. However, the company’s revenue for February 2025 demonstrated a 43.1% increase year-over-year, reaching NT$260.01 billion [3][4]. This revenue surge indicates TSMC’s strong position in the semiconductor industry [3]. Demand for semiconductors is rising, particularly with the expansion of AI and other advanced applications [3]. TSMC is strategically investing in the U.S. to capitalize on this demand [3].
tariff uncertainties and geopolitical risks
Economic uncertainties and the implications of tariffs present significant risks for TSMC [1]. On March 10, 2025, China implemented retaliatory tariffs against the U.S., which included a 15% tariff on food and farm products, and a 10% tariff on items such as soybeans, beef, and fruit [4]. These trade tensions could potentially affect TSMC’s supply chain and market access [3]. Traders anticipate increased volatility amid uncertainty surrounding tariffs and their impact on economic growth [5].
analyst perspectives and strategic outlook
Despite the bearish momentum, TSMC holds a ‘strong buy’ rating from analysts, with an average price target of $232.50, suggesting a potential upside of 36.24% [2]. However, analysts recommend a ‘hold’ position based on current market conditions and valuation metrics, reflecting caution due to upcoming earnings and economic uncertainties [1]. TSMC’s $165 billion investment in the U.S., including multiple fabrication plants and an R&D center, is expected to drive long-term growth and mitigate supply chain risks [3].