While the tech titan Nvidia Corp invariably steals the show in all matters related to artificial intelligence, investors may want to shift their focus towards chip foundry powerhouse Taiwan Semiconductor Manufacturing Company Ltd. (TSM) to gauge the sentiment surrounding the broader innovation landscape. This is because TSM is gearing up to unveil its third-quarter earnings report shortly.
Market expectations for Taiwan Semiconductor, also known as TSMC, are set at an earnings per share of $1.80, with a high estimate of $1.90 for the upcoming report. In the corresponding period last year, the company posted an EPS of $1.29. Revenue predictions stand at a consensus of $22.65 billion, with an optimistic outlook of $23.2 billion, a significant rise from the $17.07 billion generated a year prior.
Sentiment appears optimistic towards TSM stock with the company consistently surpassing bottom-line forecasts. Over the last four quarters, TSMC has exceeded earnings expectations by an average of 6.03%. Additionally, TSMC continues to expand its global presence, recently marking its territory with the construction of a fabrication facility in Dresden, Germany.
However, there are dissenting voices when it comes to TSM stock. The magnitude of its earnings beats has shown a decreasing trend since Q3 2023. Moreover, recent bearish sentiment has been on the rise, signaling a skeptical outlook in terms of technical analysis.
Exploring the Direxion ETFs: Despite the mixed sentiment among investors on TSM stock, Direxion has capitalized on this debate with its Taiwan Semiconductor-focused exchange-traded funds. The Direxion Daily TSM Bull 2X Shares (TSMX), designed to deliver 200% of TSMC’s performance, appeals to bullish investors.
On the flip side, the Direxion Daily TSM Bear 1X Shares (TSMZ) was introduced to offer 100% inverse exposure to TSM stock. Both funds involve considerable risk, and investors are advised against holding positions for longer than a day due to the compounding effects of volatility.
Insights into TSMX ETF: Launched recently, TSMX has shown promising performance trends as TSMC heads into its Q3 earnings period.
- Since its inception, TSMX has shown a consistent upward trajectory, indicating a positive environment for bullish traders.
- However, heightened intraday selling activity suggests potential volatility and unpredictable market movements.
Insights into TSMZ ETF: In contrast, TSMZ has disappointed bearish investors in the wake of the increasing interest in AI-related companies.
- Initially priced at $24.50, TSMZ now trades at $23.82, as reported by Direxion.
- Despite the challenging start for the inverse ETF, the growing pessimism towards TSM stock, particularly indicated by options data, points to a rising tide of cautious bets.
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