TSMC Shares Climb on AI Chip Dominance Despite 28th-Ranked $1.8B Volume

On August 25, 2025, TSMC (NYSE: TSM) rose 1.12% despite a 24.89% drop in trading volume to $1.80 billion, ranking 28th in market activity. The stock’s performance aligned with its strategic position in the AI-driven semiconductor sector.

TSMC is advancing its 3nm chip production with reported yields exceeding 90%, significantly outpacing competitors like Samsung, which struggles to achieve 50% efficiency. The company plans to launch a 2nm node later this year, offering 25-30% lower power consumption at comparable speeds. This innovation strengthens its role as a critical supplier for major tech firms, including Apple, AMD, and Nvidia, which rely on TSMC’s fabrication capabilities without competing for design IP.

Management forecasts AI-related revenue to grow at a 45% CAGR over five years, outpacing overall revenue growth of 20%. Early 2025 results have already exceeded these targets, suggesting potential for upward revisions. The stock trades at 24 times forward earnings, slightly below the S&P 500’s 24.1 multiple, reflecting its growth trajectory amid AI infrastructure expansion.

High-net-worth investor David Tepper increased TSMC holdings by 280% in the second quarter, signaling confidence in its AI hardware dominance. This follows a strategic shift toward AI-related assets after market volatility in early April. TSMC’s CoWoS packaging technology is pivotal for AI data centers, addressing surging demand for high-bandwidth memory solutions.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to now delivered 31.52% total returns, with a Sharpe ratio of 0.79. The highest daily gain reached 4.95%, while the lowest loss was -4.47%, reflecting the approach’s momentum-driven volatility.