TSMC hits record high ahead of earnings release

• US-listed TSMC shares ↑ 20% YTD
• Shares hit new all-time highs on Tuesday
• Forward guidance for Q3 in focus
• TSMC makes up over 20% of FXTM’s TWN index
• Technical levels for TSMC – $240, $225 and $218

US-listed shares of Taiwan Semiconductor Manufacturing (TSMC) surged to a fresh all-time high on Tuesday!

Note: TSMC shares can be traded on the Taiwan Stock Exchange (TWSE) and New York Stock Exchange (NYSE).

These gains have further solidified TSMC’s trillion-dollar valuation with sentiment firmly bullish after revenues rose a better-than-anticipated 39% in Q2.  Its shares are up 20% year-to-date, adding to the 90% gains secured in 2024.

Most importantly, the chipmaker is a key supplier to Nvidia, which has achieved a $4 trillion market valuation. This welcome development, along with a positive earnings report could push the company’s stock to fresh records. 

When will earnings be published?

• TSMC will report second-quarter earnings on Thursday 17th before US markets open.

Market expectations

• The chipmaker is expected to post earnings of $2.50 per share, with Q2 revenues rising to $31.70 billion from $20.82 billion in the prior year, marking a 52% increase.

What to watch out for

• TSMC remains exposed to Trump’s tariff drama, with Taiwan hit with a steep tariff of 32% effective from August 1st.
• Although Taiwan is said to be entering the final stages of a trade deal with the United States, the clock is ticking. The CEO of TSMC stated that tariffs had some impact on TSMC but not directly because tariffs are imposed on importers not exporters.
• It will also be interesting to see if anything is mentioned about Nvidia winning approval from the Trump administration to sell its AI chips to China.

What does this mean for FXTM’s TWN index.

• FXTM’s TWN index tracks the underlying FTSE Taiwan RIC Capped Index.
• And TSMC makes up just over 20% of the index weight, meaning that the upcoming earnings could result in heightened volatility.
• The index is up nearly 3% this month but still flat year-to-date. Prices have been trending higher in recent weeks with the all-time high roughly 7% away at 2049.
• Key levels of interest can be found at 1970, 1900 and 1830.

How will TSMC shares react?

• Markets are forecasting a 1.5% move, either up or down, for TSMC stocks on Thursday post earnings.

Technical picture

TSMC shares are firmly bullish on the daily charts with prices trading above the 50, 100 and 200-day SMA. However, the Relative Strength Index (RSI) is near 70 – signaling that prices may be overbought.

• A decline below $225.00 may see prices test $218 and the 50-day SMA at $206.
• Should $225 prove to be reliable support, this may open a path toward fresh all-time highs at $240 and beyond.