Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) shares jumped nearly 4% in Monday's premarket trading, as investors piled back into technology stocks and chipmakers. Nasdaq futures rose 2.04%, and S&P 500 futures gained 1.21%, signaling a broad risk-on mood.
The move was part of a larger rebound in growth stocks, with semiconductor names leading the charge. Taiwan Semiconductor, trading near its 52-week high, is a prime beneficiary of this renewed appetite for large-cap tech and AI-linked stocks.
Technical Setup Remains Bullish
The stock's chart looks pretty healthy. Shares are about 4.8% above their 20-day simple moving average of $418.61, 10.1% above the 50-day average of $398.22, and a whopping 32.5% above the 200-day average of $331.02. The moving averages are stacked in the classic bullish pattern — 20-day above 50-day, 50-day above 200-day — signaling a sustained long-term uptrend.
Momentum is also in a sweet spot. The relative strength index (RSI) sits at 54.14, meaning the stock isn't overbought or oversold. There's room for more gains before things get frothy.
Investors are watching the $450 level closely — that's near the 52-week high of $450.16. A decisive break above that could trigger a breakout. On the downside, support is around $385, an area that has attracted buyers before.
Taiwan Minister Defends Taiwan Semiconductor Amid U.S. Patent Dispute
On the political front, Taiwan's Minister of Economic Affairs, Kung Ming-hsin, recently came to the company's defense after reports linked it to a U.S. patent infringement lawsuit, according to The Taipei Times. Several U.S. lawmakers have urged the U.S. International Trade Commission to ban imports of Taiwan Semiconductor-made chips if they're found to violate U.S. patents. A preliminary ruling is expected this month, with a final decision possibly in October.
Kung said the ministry contacted Taiwan Semiconductor about the case, but the company declined to comment because the litigation is ongoing. He added that the government is highly confident in Taiwanese companies' compliance with patent regulations — and is "even more confident" after talking to Taiwan Semiconductor.
At a recent industry conference, leaders also called for more power capacity, more computing resources for AI development, and measures to address shortages of R&D talent. They also raised concerns about stricter environmental regulations and potential cuts to government spending on sectors like drones.
Earnings and Analyst Outlook
The next big catalyst is Taiwan Semiconductor's earnings report, expected on July 16. Wall Street is looking for earnings of $3.69 per share, up from $2.47 a year ago. Revenue is projected at $39.76 billion, compared with $30.07 billion in the same quarter last year.
The stock carries a consensus Buy rating, with an average analyst price target of $442.50. Recent analyst moves include:
- Barclays maintained an Overweight rating and raised its price target to $470 on April 22.
- DA Davidson maintained a Buy rating and a $450 target on April 17.
- Needham maintained a Buy rating and raised its target to $480 on April 16.
Price Action
As of Monday's premarket, Taiwan Semiconductor shares were up 3.56% at $439.01.
