Taiwan Semiconductor (TSM) stock down 26% due to market weakness and challenges, but long-term potential positive.

From Nasdaq: 2025-04-08 15:00:00

Taiwan Semiconductor Manufacturing Company Limited (TSM), also known as TSMC, has seen a 26% drop in stock price this year, underperforming the Computer and Technology sector. Despite near-term challenges, the long-term growth story for TSM remains strong, making it a stock worth holding onto.

TSMC’s recent struggles are attributed to broader market weakness, company-specific concerns, and geopolitical tensions. Factors like energy price hikes, softness in key markets, rising operational costs, and geopolitical risks pose challenges to the company’s growth despite increasing demand for AI-related products.

The AI boom continues to drive multi-year growth for TSMC, with AI-related revenues tripling in 2024 and expected to double again in 2025. Investments in advanced nodes and partnerships with key chip designers position TSMC as a leader in AI-driven technological advancements, paving the way for future growth.

TSMC’s resilient financial performance, highlighted by a 37% revenue surge in Q4 2024 and strong guidance for Q1 2025, showcases the company’s dominance in advanced semiconductor manufacturing. The stock trades at an attractive valuation, offering investors an appealing entry point into the semiconductor sector.

Despite short-term challenges, holding onto TSM stock is advised due to its technological leadership, strategic investments, and strong financial performance. With a Zacks Rank #3 (Hold), TSM remains a compelling long-term player in the semiconductor space, offering growth potential while navigating near-term uncertainties.



Read more at Nasdaq: Taiwan Semiconductor Stock Sinks 26% YTD: Should You Hold or Exit?