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# TSMC: Hot AI Demand Meets Capacity Crunch And Margin Erosion - Time To Take Profits? (Archive)
- URL: https://www.huntingalphas.com/tsmc-hot-ai-demand-meets-capacity-crunch-and-margin-erosion-time-to-take-profits-archive/
- Published: 2025-07-23T18:59:00.000Z
- Updated: 2026-02-28T18:21:58.000Z
- Description: TSMC’s blazing AI growth meets capacity limits, FX pressure and shrinking valuation upside.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, 2330.TW, Tech

*This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.*

## Elevator Pitch

- My high-conviction bullish view on Taiwan Semiconductor Manufacturing Company Limited aka TSMC has reaped great rewards. But after Q2 FY25 results, I am not as enthusiastic now.
- TSMC is seeing red-hot demand driven by high-performance computing needs, but due to capacity constraints, we can't expect commensurate growth.
- Usually, high demand and limited capacity leads to margin improvements via higher pricing. But not in this case as overseas fabs and a strong FX headwind may offset pricing gains.
- TSM stock appears slightly overvalued versus peers, trading at a lower-than-usual discount, which tempers its relative attractiveness.
- TSM stock vs. the S&P500 is at a key resistance level and seeing slowing buyer momentum. I think it is prudent to take some profits off the table here.

Read the full article [here](https://seekingalpha.com/article/4803598-tsmc-hot-ai-demand-meets-capacity-crunch-and-margin-erosion-time-to-take-profits?ref=huntingalphas.com).

#### Disclosures and Disclaimers

**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*