Taiwan Semi Stock Is Soaring Above AI Bubble Fears. Where Options Data Says It Is Headed Next.

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Not only is TSM stock up nearly 22% on a year-to-date basis, it has also earned a 100% Strong Buy rating from the Barchart Technical Opinion indicator. There’s seemingly no stopping this freight train, in part because of where it sits in the production chain.Unlike the frontline semiconductor companies, Taiwan Semiconductor — better known as TSMC — is a foundry. Significantly, this status means that it doesn’t compete with other finished products. Rather, when AI demand rises, other chip designers contract TSMC to build their chipsets. By sitting upstream in the production line, the company does the equivalent of selling tickets to the big game rather than betting on which team will win the matchup.If Palantir is Near a Bottom, What's the Best Play in PLTR Stock?Adobe (ADBE) Stock Has Been Beaten Up But the Smart Money Remains ResilientOption Volatility And Earnings Report For February 23 - 27Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else.In other words, TSMC rises on the front-loaded macro picture of AI. So long as people desire machine learning — and this incentive isn’t going anywhere — TSM stock will likely benefit.Even in the specific details, the foundry stands on compelling ground. For example, on a cumulative basis, options flow — which focuses exclusively on big block transactions likely placed by institutional investors — in February has been overwhelmingly bullish. Not only that, some of the most optimistic sessions (such as the Feb. 12 session) feature debit-based calls.These derivatives typically feature far out-the-money (OTM) strike prices, which means that TSM stock must rise to meet specific profitability thresholds. That’s a much stronger signal than credit-based options, which may hide neutrality in their intent.Another intriguing factor to consider is volatility skew. Definitionally, the skew is a distortion of the volatility surface area. Under a condition of no sentiment or structural bias, this indicator would be perfectly flat across the strike price spectrum. However, as smart money traders buy “insurance” against either downside or upside risk, the skew becomes distorted, allowing retail traders to read the sentiment profile of sophisticated market participants.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P Futures6,906.75 +3.00 (+0.04%)Dow Futures49,230.00 -6.00 (-0.01%)Nasdaq Futures25,055.00 +26.25 (+0.10%)Russell 2000 Futures2,657.20 +2.20 (+0.08%)VIX19.55 -1.46 (-6.95%)Gold5,229.30 +53.00 (+1.02%)Trending tickersAMD Advanced Micro Devices, Inc. 213.84 +17.24 (+8.77%)WDAY Workday, Inc. 130.23 +1.02 (+0.79%)ZETA Zeta Global Holdings Corp. 16.98 +2.00 (+13.35%)ETH-USD Ethereum USD 1,889.26 +64.25 (+3.52%)F Ford Motor Company 14.20 +0.56 (+4.11%)PortfolioSign in to access your portfolioSign inTop gainersKEYS Keysight Technologies, Inc. 301.48 +56.48 (+23.05%)IBRX ImmunityBio, Inc. 11.55 +1.72 (+17.50%)UCTT Ultra Clean Holdings, Inc. 71.96 +10.55 (+17.18%)DRS Leonardo DRS, Inc. 43.82 +5.68 (+14.89%)BEAM Beam Therapeutics Inc. 32.29 +3.96 (+13.98%)Top losersCECO CECO Environmental Corp. 60.00 -17.68 (-22.76%)XMTR Xometry, Inc. 44.44 -12.71 (-22.24%)WHR Whirlpool Corporation 71.67 -11.54 (-13.87%)AWI Armstrong World Industries, Inc. 174.30 -18.53 (-9.61%)PLNT Planet Fitness, Inc. 82.61 -8.14 (-8.97%)Most activeNVDA NVIDIA Corporation 192.85 +1.30 (+0.68%)INTC Intel Corporation 46.12 +2.49 (+5.71%)PLUG Plug Power Inc. 1.9100 +0.0700 (+3.80%)IBRX ImmunityBio, Inc. 11.55 +1.72 (+17.50%)AMD Advanced Micro Devices, Inc. 213.84 +17.24 (+8.77%)Top economic eventsEarnings eventsMy earnings eventsEarnings events