Why Taiwan Semiconductor Stock Had a Thursday to Forget

In nearly every stock’s life, sooner or later it has a day where the market just can’t decide whether it’s a buy or sell. That happened to mighty chipmaker Taiwan Semiconductor Manufacturing (NYSE: TSM) (TSMC) on Thursday. Not coincidentally, this was the trading session just after the current hot company in the chip sphere published its latest market-shaking news item. On the day, TSMC traded sideways, which happened to match the flat line of the bellwether S&P 500 index.

Here come the professional bulls

This occurred despite a clutch of generally positive new analyst takes on TSMC shares. Numerous pundits felt compelled to weigh in on TSMC, as graphics processing unit (GPU) king and company peer Nvidia had unveiled its second quarter of fiscal 2025 results after market close on Wednesday.

Citigroup, for one, feels there’s more gain in store for TSMC stock. In a fresh analysis, the bank pointed out that the company has managed to double capacity to produce its chip-on-a-wafer-on-substrate (CoWoS). This next-generation “packaging” technology is designed for high-performance computing (HPC) and for artificial intelligence (AI) functionalities.

The bank reiterated its buy recommendation on TSMC, as did Bank of America. BofA’s new research note on the chipmaker shows that it continues to be encouraged that demand for AI capacity is strong, among other factors supporting the Taiwan-based company.

Ignoring the industry, for now

Nvidia’s trailing and anticipated growth will almost certainly help support TSMC’s business. Still, expectations for the former company’s quarter were extremely high, and anytime that happens more than a few market players are sure to be disappointed. No matter the continued praise from pundits, at least some of those investors will continue to give Nvidia and any associated stock the cold shoulder for a bit.