TSMC stock dips 5.5% despite strong earnings and AI-driven demand
Taiwan Semiconductor Manufacturing (TSM) saw its stock fall by 5.5% on March 3, 2026. The decline came despite strong earnings and a positive long-term outlook, with analysts pointing to broader market pressures as the likely cause.
TSMC released its Q4 earnings on February 26, 2026, reporting earnings per share (EPS) of $3.11 and revenue of $30.65 billion. The company also announced a quarterly dividend of $0.9503, set to be paid on July 9, 2026. Despite the recent drop, shares had shown resilience earlier in the year, climbing from $348.85 on February 6 to $374.58 by February 27, even reaching a 52-week high of $390.10 on the day of the earnings report.
Market observers attributed the March 3 decline to geopolitical tensions and a cautious trading environment. However, no specific escalation in tensions between the USA and Iran was documented during this period. The stock also remained above its 50-day and 200-day moving averages, suggesting underlying strength.
Institutional activity around TSM varied in Q4 2025. Point72 Asset Management significantly increased its stake by 157.1%, while firms like FMR LLC, Massachusetts Financial Services, and Macquarie Group reduced or exited their positions. Analysts maintained a positive outlook, with a consensus 'Buy' rating and an average price target of $391.43. Forecasts for the current fiscal year project a full-year EPS of $9.20. Price targets from individual firms ranged widely, from Bernstein's $330 to DA Davidson's $450.
The semiconductor sector continued to benefit from AI-driven demand, which supported TSM's performance in February. Yet, the broader market's risk-off sentiment weighed on the stock in early March.
TSMC's stock dip on March 3, 2026, reflects short-term market caution rather than company-specific weakness. With strong earnings, a solid dividend, and institutional backing from firms like Point72, the long-term outlook remains positive. Analysts continue to favour the stock, though price targets vary significantly.
