What happened
Taiwan Semiconductor Manufacturing (TSM +5.33%) had a see-saw session on the market Tuesday. Shares of the global chip maker rose as much as 3.4% during the day, before settling down to a marginal (0.2%) decline at closing time. This movement was influenced by the latest activity of a famous investor.
So what
On Tuesday, it was revealed that said investor, Cathie Wood of Ark Invest, had piled back into Taiwan Semiconductor. Ark Autonomous Technology and Robotics ETF snapped up 98,170 shares of the company. Previous to this, according to reporting from Bloomberg, Ark's funds had last held Taiwan Semiconductor stock in the fourth quarter of 2021.
The company's stock has become a hot item lately because of the popularity of artificial intelligence (AI). It almost goes without saying that advanced AI functionalities require quite a bit of processing power, so it's likely Taiwan Semiconductor will be a busy manufacturer of next-generation chips.
That, however, might also be a drawback. After the initial flush of excitement about AI stocks and related titles, investor sentiment has cooled somewhat and some investors have sold out in order to book quick profits. Any Ark Invest buy attracts interest and often kicks up the price of a stock, but in this case the market seems to be wary of Taiwan Semiconductor's recent sharp rise.
NYSE: TSM
Key Data Points
Now what
Although it's become relatively expensive, Taiwan Semi is a company with solid fundamentals, and strong growth numbers behind and (likely) in front of it. The stock is certainly worth watching, although would-be buyers should consider whether the elevated price and valuations make it a buy just now.
