The Potential of Taiwan Semiconductor
While Nvidia Corp usually takes center stage in AI discussions, the focus is turning towards Taiwan Semiconductor Manufacturing Company Ltd. (TSMC) as it nears the release of its Q3 earnings report. Investors are eyeing TSMC’s performance for insights into the broader tech landscape. Analysts project an EPS of $1.80, with a high-end estimate of $1.90, compared to $1.29 a year earlier. Revenue expectations stand at $22.65 billion, reaching $23.2 billion in optimistic scenarios, up from $17.07 billion a year ago.
Market sentiment towards TSM stock appears positive, with the company consistently surpassing earnings expectations. In the last four quarters, TSMC has beaten estimates by an average of 6.03%. Moreover, the tech entity is expanding globally, exemplified by its recent facility launch in Dresden, Germany.
Critiques and Concerns
Although TSM stock enjoys favor among investors, there are growing concerns. Earnings beats have been diminishing since Q3 2023, and recent technical indicators suggest a shift towards bearish sentiment.
Exploring Direxion’s Offerings
Direxion’s lineup of Taiwan Semiconductor-focused ETFs provides a battleground for traders. The Direxion Daily TSM Bull 2X Shares (TSMX) offers 200% exposure to TSMC shares, while the Direxion Daily TSM Bear 1X Shares (TSMZ) seeks to deliver the inverse performance of TSM stock. Both options come with significant risk, with Direxion advising against holding positions for more than a day due to volatility-induced compounding effects.
The TSMX ETF Evolution
Since its recent launch, TSMX has steadily climbed in an upward trajectory, signaling positivity for bullish traders. However, high intraday selling volumes hint at potential market turbulence ahead.
The TSMZ ETF Performance
Contrastingly, TSMZ has not been as fruitful for bearish investors in light of the AI sector’s bullish momentum. Despite a challenging start, pessimistic options data points to growing smart money bets against TSM stock.