‘Headline Threat’ Lurks as TSM Shines Shiny on AI Demand ‘Headline Threat’ Lurks as TSM Shines Shiny on AI Demand – Taiwan Semiconductor (NYSE:TSM)

Taiwan Semiconductor Manufacturing Co. TSM simply delivered 1 / 4 that Wall Avenue will not quickly neglect – however you would not understand it by wanting on the inventory chart.

The chip large crushed first quarter estimates, powered by AI-hungry demand for its 3nm and 5nm chips, but shares proceed to short-circuit.

Sturdy Fundamentals, Stronger Headwinds

First quarter income surged 41.6% year-over-year to $25.53 billion, topping expectations of $23.92 billion. EPS got here in at $2.12, nicely above the $1.82 consensus. TSM additionally projected second quarter income between $28.4 billion and $29.2 billion, bolstered by continued power in AI processor demand – assume Nvidia Corp‘s NVDA GPUs and Apple Inc‘s AAPL iPhones.

As Direxion’s Head of Capital Markets Jake Behan put it: “TSM’s robust outcomes, pushed by its vital provider function to Nvidia, sign power forward of a pivotal semiconductor earnings season….TSM’s robust earnings and sustained capex plans place it as a bellwether, signaling continued AI-driven demand – a bullish sign for the sector.”

However do not cue the victory music simply but.

Learn Additionally: Nvidia, Meta And three Extra Shares Are This Strategist’s Prime Buys: Right here’s Why

TSM Inventory Chart Is Flashing All Pink Lights, A Loss of life Cross

Chart created utilizing Benzinga Professional

Regardless of the stellar report, TSM inventory is flashing technical warning indicators all around the board. At $151.74, it is buying and selling beneath its eight, 20, 50 and 200-day easy shifting averages (SMAs). In dealer communicate, that is a bearish sign coming from each main development line. The 50-day SMA stands at $177.31, and the 200-day SMA is approach up at $183.96 – have just lately made a Loss of life Cross.

“A pre-tariff shopping for rush might have padded TSM’s bump in gross sales, which raises the query of whether or not short-term power may masks longer-term softness,” warned Behan.

Volatility, Thy Identify Is Semis

With commerce warfare chatter and tariff jitters looming massive, even the very best earnings may not be sufficient to maintain the rally going. As Behan notes: “Headline danger continues to be a key headwind for the semiconductor sector.”

For traders trying to play the volatility, traders might take a look at the Direxion Every day TSM Bull 2X Shares TSMX (2x day by day return) and the Direxion Every day TSM Bear 1X Shares TSMZ (-1x day by day return) to journey the waves – or defend from them.

TSM’s fundamentals are flexing, however the charts are trembling. AI demand is sizzling, however commerce dangers and technical strain might depart the inventory caught within the cooling chamber.

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Picture: Shutterstock/Jack Hong