TSMC shares plummeted 3.45% in pre-market trading amid broader market weakness.

TSMC shares plummeted 3.45% in pre-market trading on December 18, 2025, closing at $276.96, outpacing the S&P 500’s 1.16% decline amid broader market weakness as the Nasdaq fell 1.81%. The drop contrasted with the company’s strong year-over-year revenue growth driven by AI chip production for clients like Nvidia and Broadcom.

Analysts remain divided, with Bernstein and SocGen reaffirming an “Outperform” rating and a $330 price target, citing long-term AI-driven demand and TSMC’s leadership in advanced manufacturing. However, near-term concerns include mixed momentum, such as a 6.5% monthly revenue decline in November and a Zacks Rank downgrade to #4 (Sell). The stock’s forward P/E aligns with industry averages, while its PEG ratio of 0.99 suggests valuation reflects growth expectations.

Investors are weighing near-term volatility against structural tailwinds from AI infrastructure expansion and TSMC’s strategic R&D investments. While macroeconomic uncertainties persist, the semiconductor giant’s dominance in advanced chip manufacturing and partnerships with key tech players reinforce its long-term competitive edge.

Market analysts have also pointed to key support and resistance levels in the stock’s price behavior, which could provide insight into its near-term direction. A breakout above the $285 resistance level may signal a reversal of the recent bearish trend, while a drop below $265 could intensify short-term pessimism among investors.