Investors are grappling with a disconnect in the market for Taiwan Semiconductor Manufacturing Company (TSMC). Despite the chipmaker reporting powerful revenue growth for November and receiving bullish analyst upgrades, its shares experienced a sharp decline last Friday. This divergence raises a critical question: is the market overlooking robust fundamentals, or are institutional investors simply capitalizing on positive news to secure profits?
Strategic Certainty Amidst Market Noise
Beyond the monthly sales figures, two significant strategic developments provide long-term confidence. First, recent market data has dispelled rumors of exorbitant price hikes for TSMC’s upcoming 2-nanometer (2nm) chip technology. Instead of the feared 50% increase, the premium for the new wafers is expected to be a more moderate 10% to 20% over the current 3nm process. This balance allows TSMC to protect its margins without alienating key clients such as Apple and Nvidia.
Second, the financing for TSMC’s major U.S. expansion in Arizona is now secured. Through the finalized CHIPS Act, the company will receive $6.6 billion in direct grants and access to up to $5 billion in loans. This substantial government support significantly de-risks the execution of the colossal $65 billion project.
Conflicting Institutional Moves Create Volatility
The current share price volatility appears partly driven by a sector rotation and profit-taking following a strong yearly rally of over 26%. A look at major fund activity reveals a tug-of-war between different strategies. While some entities, like Biglari Sardar, reduced their positions to lock in gains, others saw the period as an entry opportunity. Gilder Gagnon Howe & Co., for instance, substantially increased its stake in the most recent quarter.
Should investors sell immediately? Or is it worth buying TSMC?
This institutional divergence suggests a phase of portfolio reallocation is underway. Meanwhile, analyst sentiment remains decidedly positive. Research firm Bernstein recently raised its price target on TSMC to $330, reaffirming its “Outperform” rating.
Operational Strength Contrasts with Price Action
The Friday sell-off, which saw shares drop 4.23% to €249.00, stands in stark contrast to the company’s operational performance. TSMC reported consolidated November revenue of NT$343.61 billion (approximately US$11 billion). This represents a substantial year-on-year increase of 24.5%.
Although it marked a slight sequential dip from October’s record high, the long-term trajectory points steeply upward. For the first eleven months of 2025, total revenue has climbed by almost 33%. This performance firmly places the company on track to meet its guidance for the fourth quarter. The recent price pressure, therefore, seems less rooted in operational weakness and more in broader market mechanics.
Conclusion
The situation at TSMC presents a classic clash between short-term price action and fundamental value. The latest share price decline appears to ignore confirmed revenue growth and a secured roadmap toward 2nm technology dominance. With its technological leadership further cemented by U.S. funding and analysts projecting significant upside, the evidence suggests this is likely a technical correction within a healthy long-term uptrend.
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