---
title: "TSM's earnings report is very impressive, but why isn't the stock price following the rise?"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/40165289.md"
description: "$Taiwan Semiconductor(TSM.US)'s earnings report shows net profit up 58% year-on-year, revenue up 40.6%, with EPS hitting NT$22.08 directly, crushing all market expectations. Management also raised the full-year dollar revenue growth guidance to 30%+, with Q2 projected at $39–40.2B (a further 10% quarter-on-quarter increase). Advanced processes account for 75% of wafer revenue, and HPC (which includes AI and 5G) makes up 61%—this is no longer just a semiconductor foundry, it's an AI money-printing machine..."
datetime: "2026-04-24T08:58:45.000Z"
locales:
  - [en](https://longbridge.com/en/topics/40165289.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/40165289.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/40165289.md)
author: "[好柿花生Option](https://longbridge.com/en/profiles/27346521.md)"
---

# TSM's earnings report is very impressive, but why isn't the stock price following the rise?

$Taiwan Semiconductor(TSM.US) reported Q1 net profit up 58% year-on-year, revenue up 40.6%, EPS directly hit NT$22.08, smashing all market expectations. Management also raised the full-year US dollar revenue growth guidance to 30%+, with Q2 projected at $39–40.2B (a further sequential increase of +10%). Advanced processes accounted for 75% of wafer revenue, and HPC (which includes AI and 5G) accounted for 61%—this is no longer just a semiconductor foundry, it's an AI money-printing machine.

Needham raised its price target from $410 to $480, Barclays from $380 to $450. Based on the current price of $387.44 (April 23), there's still 15–24% upside potential to discuss.

But why isn't the stock price moving? That's the strange part. The week of the April 17th earnings release, the stock price actually didn't strengthen much. Seeking Alpha directly ran an article titled: "Q1 Earnings Didn't Fuel A Rally." I'm wondering why that is.

**In retail investor terms, this means—the market had already priced in the earnings report at the $380 level. No matter how good the report itself is, it only "confirms the existing price," not "lifts the price." In this situation, expecting a big bullish candle to break above $420 is unrealistic.**

#### Key Levels and Market Structure

I'm watching two price levels myself—the upper level at $420 (the forward position for Barclays' target price) and the lower level at $375 (the starting point of the post-earnings gap, also the 20-day moving average for the past month). If $375 breaks, the previous long structure needs to be re-evaluated.

I can't give you specific numbers for real-time IV / Put-Call / Skew data from the options market here (requires checking marketchameleon or Barchart for real-time data), but a reasonable common-sense inference is: earnings are just over, IV crush has already happened once, and current IV should be in the lower range of the past 3 months. This means—the time value cost of buying options is getting cheaper.

#### The Strategy I Chose

Since the view is "bullish but don't expect a big rally," and the cost of buying calls has come down after the IV crush, my implementation plan is a Bull Call Spread:

Buy $395 Call + Sell $420 Call, DTE 36 days (expiring 2026-05-29)

Why these strike prices? $395 is slightly OTM ($7.5 above the current price), not expensive but has delta; $420 is the forward position for Barclays' target, where upside beyond that level is increasingly thin. Actively capping gains to lower cost is a reasonable trade-off.

Assuming a net debit ≈ $8/share (this is a rough estimate based on historical IV, please refer to actual market premiums):

Max loss: $8 × 100 = $800/spread (occurs if TSM falls below $395)  
Max profit: ($25 − $8) × 100 = $1,700/spread (if TSM ≥ $420 at expiration)  
Break-even point: $395 + $8 = $403  
Stop-loss trigger: $375 (break below the starting point of the post-earnings gap, invalidating the long structure)

  
Why not just buy a naked Call? There are no earnings catalysts within the 36 days (Q2 is in mid-July). Even though IV is cheap now, a 36-day naked long still pays theta. Using a spread to hedge theta makes the P&L volatility more friendly for a retail account.

**Caution ⚠️**

First, TSM has geopolitical tail risks—any news about tariffs/export controls could blow it up overnight. So the position size shouldn't be heavy; I'm keeping it at 6–8% of my portfolio.

Second, if the AI capex cycle suddenly slows down (like hyperscalers cutting orders), $420 won't be reached at all. The spread expires worthless, losing the full $800.

Third, if TSM unexpectedly runs with a surprise move (like OpenAI announcing exclusive capacity locking), then my $420 cap will miss most of the gains—that's the inherent cost of the spread.

**In short, the Q1 data was so good that the market can't fully digest it, so there's no need to be greedy for a big bullish candle. Use a Bull Call Spread to capture the "modest upward drift" segment. Don't chase highs, don't buy naked calls, stop-loss at $375—this is the TSM operation I'll implement this week.**

### Related Stocks

- [TSM.US](https://longbridge.com/en/quote/TSM.US.md)
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- [BCS.US](https://longbridge.com/en/quote/BCS.US.md)
- [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md)

## Comments (1)

- **西蟹老板de交易员 · 2026-04-24T09:37:31.000Z**: When was this article published…