TSMC shares fall on margin concerns despite record profit
TSMC reported a record profit and strong revenue outlook, but its stock fell as new factory costs pressured margins. European chip stocks also declined, while the S&P 500 broke a three-day losing streak.
TSMC reported a record profit and a strong fourth-quarter revenue outlook, yet its stock fell because margins disappointed due to costs from new factories, including one in Dresden. Management sounded cautious on non-AI business. IDC reported smartphone shipments fell 22 percent in the third quarter as manufacturers raised prices due to expensive components. European chip stocks suffered, with Infineon losing 5.3 percent, ASML falling 4.2 percent, and STMicroelectronics dropping 3.8 percent. Data center beneficiaries like Siemens Energy and Hochtief were under pressure, while 2G Energy lost 11.5 percent.
The DAX stabilized at 25,368 points, up 0.3 percent. In the US, the S&P 500 closed up 0.3 percent at 7,744 points, breaking a three-day losing streak, while the Nasdaq Composite recovered from a 1.4 percent loss. The 10-year US Treasury yield fell to 5.09 percent, the largest daily drop since August, despite hot producer prices. Gold rose 1.6 percent to $4,170 per ounce. The market is rotating out of AI favorites into broader sectors like banks, healthcare, and commodities, driven by margin concerns in chipmakers and a flight to safety in bonds.