TSMC drops 3.45% in pre-market trading amid market-wide weakness

Taiwan Semiconductor Manufacturing Company (TSMC) dropped 3.45% in pre-market trading on December 18, 2025, underperforming broader indices like the S&P 500 and Nasdaq amid market-wide weakness.

The decline occurred despite TSMC’s robust AI-driven revenue growth, which hit 24.5% year-over-year in November 2025. Analysts highlighted the company’s leadership in advanced chip manufacturing and strategic R&D investments as long-term strengths. However, near-term volatility reflects mixed sentiment, with some observers cautioning about execution risks and valuation concerns. Bernstein and SocGen reiterated an “Outperform” rating with a $330 price target, while Zacks downgraded its EPS estimates and assigned a #4 (Sell) rank.

TSMC’s forward P/E ratio aligns with sector averages, and its PEG ratio of 0.99 suggests valuation is partially justified by growth prospects. Yet, the stock faces downward pressure amid macroeconomic uncertainties and skepticism about short-term execution. Investors are weighing these factors against the semiconductor giant’s dominant role in AI infrastructure and its ability to sustain momentum in 2026.

Market analysts remain divided, with some emphasizing structural AI growth potential and others focusing on near-term risks. TSMC’s trajectory will likely hinge on upcoming earnings releases, macroeconomic developments, and its capacity to navigate geopolitical and cost-related challenges in its U.S. and EU expansion.