Taiwan Semiconductor Manufacturing (TSM) and Super Micro Computer (SMCI) both faced heavy selling pressure on Wednesday, driven by a broad sector rotation and separate headwinds, though each company's underlying story points to resilience.
TSM's Technical Pullback
Shares of TSM fell more than 6%, closing at $446.87, as investors rotated out of technology stocks. The Nasdaq lost 0.87%, while financials and communication services led the S&P 500 higher. The decline was viewed largely as profit-taking after TSM reached a 52-week high in June. Technically, the stock remains in bullish territory: it sits 2.4% above its 20‑day moving average, 7.3% above the 50‑day, and 30.8% above the 200‑day, with rising moving averages and a neutral RSI of 54.34. Resistance is near $450, support around $405.50. Wall Street expects earnings of $3.77 per share on $39.76 billion in revenue when the company reports on July 16, up sharply year‑over‑year. Analysts maintain a consensus Buy rating and an average price target of $489.17, with Bank of America targeting $590 and Susquehanna $575. Two vice presidents bought a combined $155,830 in stock in late June, signaling insider confidence, and the company raised its quarterly dividend to $1.1136.
Super Micro's Export Investigation
Super Micro stock initially gained 5% on Thursday after issuing an open letter that sought to reassure customers and partners about a Taiwanese investigation, but later reversed those gains to trade slightly down. Four employees were questioned on June 29 regarding the alleged illegal export of AI servers containing Nvidia chips that are subject to U.S. export controls. Two were detained pending a hearing, and two were released on bail; all have been placed on administrative leave. The company stressed it is not the target of the probe and has cooperated with authorities for months. Chief Revenue Officer Matthew Thauberger said the situation has “absolutely no impact on our ability to serve and support you.” The investigation had already led to three arrests and the seizure of 50 servers in May. Separately, U.S. authorities had charged co‑founder Wally Liaw in March over a scheme to divert servers to China; Liaw resigned. Despite the assurances, the stock has dropped 22% over the past seven sessions.
The semiconductor sector remains under pressure from rotation dynamics and export‑control scrutiny, but analyst optimism and insider activity suggest that many see the pullback as a temporary setback.
