Ahead of Taiwan Semiconductor Earnings, Here's What Barchart Data Says Comes Next for TSM Stock

Taiwan Semiconductor (TSM) is widely regarded as one of the most important artificial intelligence (AI) companies in the world, but options traders believe that is unlikely to translate into a post-earnings rally. Consensus is for TSMC to record $4.45 in earnings per share (EPS) for its second financial quarter on Oct. 15, which would represent a 52.4% growth on a year-over-year basis. 

Heading into the earnings event, Taiwan Semiconductor stock is up about 40% year-to-date. 

Options Sentiment Is Bullish for TSMC Stock

In the derivatives market, a put-to-call ratio of more than 1.00x is often treated as indicating bearish sentiment. 

For TSMC contracts expiring Oct. 23, that reading is currently set at 1.06x, according to the latest data from Barchart, and the lower price on those contracts sits at $423.42, signaling potential for a 4.28% decline through the end of next week. 

However, Taiwan Semiconductor's valuation remains rather attractive heading into 2027. The behemoth is currently trading at a price-to-sales (P/S) multiple of about 19x, which makes it significantly cheaper to own than several other best-of-breed AI stocks, including Nvidia (NVDA) at nearly 26x. 

AI Remains a Tailwind for TSMC Shares

Despite dovish options market sentiment, TSMC’s underlying fundamentals present a compelling long-term investment case.

The recent dip comes amid broader concerns surrounding the AI boom, while its strong revenue growth (54.6% in September) suggests its core business remains resilient.  

All in all, as a critical manufacturing partner for Nvidia, Apple (AAPL), and AMD (AMD), Taiwan Semiconductor occupies a commanding position in advanced chipmaking. Its technological expertise, manufacturing scale, and deep customer relationships create substantial barriers to competition.

Plus, the semiconductor company also currently pays a dividend yield of 0.91%, which makes the overall risk-reward dynamics even more favorable for investors seeking to ride the AI wave. 

How Wall Street Recommends Playing TSMC

Wall Street analysts do not agree with the options market sentiment on TSMC stock. According to Barchart, the consensus rating on Taiwan Semiconductor sits at “Strong Buy” currently, with the mean price target of about $520 indicating potential for significant further upside through the next 12 months. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.