-3.14% for TSMC stock as chip production faces continued supply issues

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TSMC slides 3.14% to $412.97 today

Highlights

TSMC posted record May 2026 revenue of NT$416.98 billion ($13.17 billion), up 30.1% year-over-year, led by strong AI chip demand.
Cumulative revenue from January through May rose 30%, but ongoing supply constraints and heavy capital outlays may affect future growth pacing.
Technical momentum remains bearish with price trading below key moving averages, expecting high intraday volatility within a $393.98 to $431.96 range.

Growth momentum slows under supply constraints despite record revenue

TSMC reported record consolidated net revenue for May 2026, reaching NT$416.98 billion (US$13.17 billion) and marking a 30.1% year-over-year increase, underscoring ongoing demand for advanced chips used in artificial intelligence applications. Cumulative net revenue from January through May 2026 rose 30% year-on-year to NT$1,961.8 billion, confirming a strong multi-month growth trajectory. The company also cited persistent supply constraints and increased capital deployment to expand production, especially in international markets such as the U.S., factors that could influence the pacing of future gains, though price action has remained under broader selling pressure.

Bearish momentum dominates as technical indicators confirm resistance

On the H1 chart, TSM is trading below the MA-20 at $422.67 and the MA-50 at $431.51, while remaining above the daily MA-200 at $328.24. The Ichimoku Kijun sits at $421.84 and acts as immediate resistance. Technical momentum indicators show MACD signaling a Sell, ADX at a neutral trend strength, RSI at 39.81, CCI in Sell territory, and BBP indicating oversold levels. The Stoch RSI is neutral, and the Awesome Oscillator aligns with a selling bias, all combining to reflect a dominant short-term bearish momentum.

Downside risk prevails as volatility heightens within defined range

Over the next two to three trading days, TSM is expected to fluctuate within a volatility band between $393.98 and $431.96. A move above $421.84 could prompt further upward price extension, while a break below $393.98 would reinforce continued downside momentum. The baseline outlook is for near-term sideways movement within this range, but the probability of a further decline is considered very high given prevailing momentum signals.

Anton Kharitonov, expert at Traders Union, sees strong growth in TSMC's fundamentals driven by record revenue and robust demand for advanced chips. However, the price remains under clear technical pressure, with persistent supply constraints and a dominant short-term bearish trend on the charts. He believes that until clear resistance levels like $421.84 are reclaimed, the downside risk outweighs the bullish narrative. "Despite impressive financial results, I remain cautious as technical signals point to elevated probability of further declines in the near term."

Previously it was reported that TSMC’s robust revenue growth and resilience amid AI-driven demand positioned the stock for continued strength, despite emerging overbought signals and short-term uncertainties. The present shift to pronounced bearish momentum alongside record revenue underscores a heightened risk of further downside, making sustained price action above the Ichimoku Kijun at $421.84 a crucial trigger for any potential reversal in the days ahead.

Source of Data: TSM Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.