At Extreme Investor Network, we pride ourselves on providing unique and valuable insights into the world of finance. Today, we want to discuss the recent developments surrounding Taiwan Semiconductor Manufacturing Co. (TSMC) and its impact on the market.
Traders have been making more bearish bets on TSMC stock in light of recent events. Following cautious industry growth guidance, Taiwan Semiconductor shares have tumbled 13% in just over a week, resulting in the loss of over $100 billion in market value. This sell-off began during the company’s first-quarter earnings call, where it adjusted its growth forecast for the microchip industry.
Put-option volume on TSMC stock is currently at its highest level in three months, indicating that more investors are anticipating further declines. Speculative interest in TSMC has been on the rise, with open interest for put and call options increasing by 20% from their 20-day average.
The chipmaker recently revised its growth expectations for the semiconductor industry to just 10% this year, citing challenges such as tightening export restrictions in the US and slowing industry growth. In a filing to the Securities and Exchange Commission, TSMC highlighted the potential risks related to inflation and interest rates, which could significantly impact the industry’s revenue and profits.
The decline in TSMC stock is part of a broader trend affecting tech companies, with other industry players like Nvidia and Super Micro Computer also experiencing losses in recent weeks. As traders await earnings reports and consider the possibility of fewer Fed rate cuts than previously expected, the Nasdaq Composite has slumped as well.
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