TSMC's stock tumbled below a key level this week, but the firm behind the drop says the pullback is temporary and the long-term outlook is still extremely bullish.

• TSMC shares fell as much as 11% from their October highs, briefly dipping under NT$2,300, as Taiwan's stock market sold off sharply alongside weak global tech sentiment.
• A foreign research firm says the drop is mostly about near-term costs: TSMC's profit margin came in lower than expected last quarter because ramping up new 2-nanometer chip production and expanding overseas are expensive before they reach full scale.
• Despite the margin pressure, TSMC's revenue and AI chip demand are still growing fast, with next quarter's sales guidance beating expectations and 2027 production already sold out.
• The same firm reaffirmed a "buy" rating and kept a massive price target — around NT$5,000 for the Taiwan stock and $1,000 for the US shares — implying the business could roughly double in revenue and profit by 2028.
• Elsewhere, Deutsche Bank reversed itself and upgraded US tech stocks after October's sharp sell-off, arguing the AI-related risks are now priced in and the drop created a buying opportunity.

Outlook: Expect TSMC's stock to stay choppy in the near term on cost concerns, but analysts expect it to recover as AI chip demand and 2-nanometer production scale up through 2026-2028.