On July 16, TSMC fell 3.09% in pre-market trading, trading at $406.77/share, with turnover of $59.81 million. The decline came despite the company reporting record-breaking Q2 results, as the market staged a classic sell-the-news reaction.

TSMC reported Q2 net profit of NT$706.6 billion, surging 77.4% year-over-year and significantly exceeding the market consensus of NT$623.73 billion. Gross margin reached 67.7%, above the expected 67.1%. However, Q3 gross margin guidance of 65%-67% implies a sequential decline from Q2 levels, while operating margin guidance of 56%-58% also fell below Q2's 60.3%. The company also flagged challenges from rising equipment prices due to inflation.

On a positive note, TSMC raised its full-year revenue growth forecast to slightly above 40%, lifted annual capex to $60-64 billion from the prior $52-56 billion range, and announced an additional $100 billion investment in Arizona, bringing total US commitments to $265 billion. Management expressed confidence in AI demand through 2030, citing a very large supply-demand gap. The broader semiconductor sector traded lower in sympathy, with AMD down 2.75%, Micron down 2.46%, Intel down 1.80%, NVIDIA down 1.35%, and Broadcom down 1.28%.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)