On June 09, 2026, U.S. stock indices fell sharply as technology and semiconductor stocks faced renewed selling pressure. Investors took profits from AI-related stocks that had seen significant gains this year. The stock ticker for Taiwan Semiconductor Manufacturing Co Ltd is TSM.
The recent downturn in U.S. stock indices, particularly in the technology sector, has raised concerns among investors. The Nasdaq 100 Index dropped by nearly 4%, with semiconductor stocks, including TSM, declining up to 8%. This selling pressure is attributed to profit-taking from AI-related stocks, which have experienced substantial gains earlier in the year. Additionally, geopolitical tensions in the Middle East, particularly concerning Iran, have further dampened investor sentiment, leading to a cautious approach in the market.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC) is the world’s largest dedicated chip foundry, boasting about 70% market share as of 2025. With a market capitalization of approximately $2.16 trillion, TSMC plays a crucial role in the semiconductor industry, providing advanced manufacturing services to major tech companies such as Apple, AMD, and Nvidia. Founded in 1987, TSMC has established itself as a leader in high-quality technology, enabling it to maintain solid operating margins even in a competitive environment.
According to GuruFocus, TSM has a GF Value™ of $291.19, which indicates that the stock is currently trading at a significant premium, with a valuation of 43.3% over its intrinsic value. This suggests that there is a lack of margin of safety for potential investors looking to enter the stock at its current price of $417.26. The high P/E ratio of 34.66x compared to its 5-year median P/E of 22.78x further supports the notion that TSM may be overvalued in the current market environment. For more details, you can check the GF Value™.
The GF Score™ ranks stocks from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been found to generate higher long-term returns (backtested 2006-2021).
TSM’s strengths lie in its exceptional profitability and growth rankings, both of which are rated 10/10. However, the valuation rank of 3/10 indicates that the stock may not be a bargain at its current price. For further insights, visit the TSM stock page.
In the past three months, insider activity has shown a significant sell-off, with insiders selling $14.0 million worth of shares compared to $1.2 million in purchases. This disparity may signal a lack of confidence among insiders regarding the stock’s current valuation.
Given the current data, TSM appears to be significantly overvalued based on its GF Value™ and P/E ratios. Investors should exercise caution and consider the implications of insider selling when evaluating potential investments in TSM. For the complete analysis, visit the TSM stock page. You can also use the GuruFocus Stock Screener to find similar opportunities.
What is TSM’s GF Score™?
TSM’s GF Score™ is 94/100, indicating strong overall performance across various financial metrics.
Is TSM overvalued or undervalued?
TSM is currently overvalued, with a GF Value™ of $291.19 compared to its current price of $417.26, indicating a 43.3% overvaluation.
What is TSM’s P/E ratio compared to historical?
TSM’s P/E (TTM) is 34.66x, which is significantly higher than its 5-year median P/E of 22.78x, suggesting that the stock is trading at a premium relative to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
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