Negative: TSM faces challenges in market due to Chinese AI model, but exempted from tariffs

From Yahoo Finance: 2025-04-06 16:46:00

The US stock market faced a turbulent first quarter in 2025 with increased volatility and negative returns due to concerns about tariffs and tech stock performance. The revelation of China’s AI software DeepSeek disrupted global markets, leading to a significant sell-off in US indexes.

The US government implemented policies to support US tech firms and counter the impact of China’s DeepSeek AI, including tariffs on Chinese trade. The Federal Reserve’s decision to maintain interest rates added to market uncertainty, impacting sectors like banking with potential non-performing loans.

President Trump announced global tariffs on Europe and China, prompting retaliatory measures and market concerns. Tariffs of 54% on Chinese goods were set to take effect, with China imposing reciprocal tariffs of 34%. This led to the biggest market drop since COVID-19, affecting supply chains globally.

Amidst continuous stagflation in the US economy, investors should focus on sectors like energy, real estate, healthcare, finance, and tech for stable growth. The article provides insights into top stock picks in various sectors based on hedge fund holdings and historical performance, emphasizing the importance of imitating successful hedge fund strategies.

Taiwan Semiconductor Manufacturing Company (TSM) faced challenges in the market after the emergence of a more efficient Chinese AI model. Despite this setback, TSM remains a dominant player in the global foundry market with a 50% market share. The company’s strategic investments and revenue performance position it as a strong contender for long-term growth.

TSM was specifically targeted by China’s retaliatory tariffs on US tech companies, affecting its market outlook. However, US government policies exempted TSM from tariffs, showcasing a positive stance towards the company. With a revenue of $26.73 billion and significant growth potential, TSM remains an attractive option for investors seeking long-term returns.



Read more at Yahoo Finance: Is Taiwan Semiconductor Manufacturing (TSM) the Best Beginner Stock?