: TSMC stock’s sharp 13% decline prompts traders to anticipate further losses

: TSMC stock’s sharp 13% decline prompts traders to anticipate further losses

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  • Traders are making more bearish bets on TSMC stock.

  • Shares of Taiwan Semiconductor recently fell 13% in just over a week following cautious forecasts for industry growth.

  • Put volume on the stock is the highest in three months, even after the sharp decline, according to Bloomberg data.

Investors are betting that Taiwan Semiconductor Manufacturing Co.’s stock could have even more room to fall after suffering a double-digit decline.

TSMC stock has fallen more than 13% since April 11, a selloff that wiped out more than $100 billion in market value. The stock’s most recent decline began during the company’s first-quarter earnings call, where it reduced its growth forecasts for the microchip industry.

Put options, which are bearish bets on the stock, hit their highest level in three months on Friday, according to Bloomberg data, suggesting that more and more investors are betting that the fall will continue. Speculative fervor for TSMC has generally been increasing, with open interest in puts and calls increasing 20% ​​from their 20-day average, Bloomberg reported.

The buzz around TSMC comes shortly after the chipmaker cut its growth forecast for the semiconductor industry to just 10% this year, highlighting challenges such as tightening export restrictions in the United States and the slowdown in the growth of the semiconductor industry.

“Recently, several major systemic political, economic and financial crises have negatively affected the global economic, banking and financial sectors, including the semiconductor industry and markets,” the company said in a statement. deposit to the Securities and Exchange Commission last week.

He added that future risks, such as those related to inflation and interest rates, could “result in a dramatic decline in revenues or profits for the semiconductor industry as a whole.”

The company follows in the footsteps of other tech darlings, which have stumbled in recent weeks as traders anxiously await their results and ponder the possibility of smaller Fed rate cuts this year than expected. Over the past week, chipmakers Nvidia and Super Micro Computer fell 8% and 22%, respectively, while the Nasdaq Composite fell 3%.

Read the original article on Business Insider

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