TSM Earnings in Focus: How Traders Can Double Down or Hedge with Leveraged ETFs Before July 17

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Taiwan Semiconductor Manufacturing (TSM) reports Q2 2025 earnings on July 17th before market open, with Wall Street expecting another strong quarter from the world's largest contract chipmaker. As demand for advanced semiconductors continues surging, TSM's production capacity and what they can charge for chips matter most to traders.

The chip manufacturer has delivered four consecutive earnings beats, with recent monthly results showing remarkable strength. April revenue jumped 48% year-over-year, while May posted nearly 40% growth. These robust numbers suggest TSM could exceed consensus estimates when it reports Q2 results.

For active traders positioning around TSM's historically volatile earnings moves, Direxion's Single Stock Daily Leveraged & Inverse ETFs provide ways to play both sides of the trade without borrowing shares or posting margin.

Q2 Earnings Outlook

Wall Street expects TSM to report $2.34 per share in earnings, representing a 58% increase from the $1.48 posted in Q2 2024. This projection reflects sustained demand for advanced chips and TSM's dominant position in leading-edge manufacturing.

Revenue growth continues accelerating as major technology companies compete for limited advanced chip supply. TSM's customer base includes Nvidia, Advanced Micro Devices, and Apple, all requiring cutting-edge production capabilities. The company plans to open nine new fabrication facilities in 2025 to meet this demand.

Operating margin guidance of 48% for Q2 represents a big jump from 42.5% a year earlier. Higher capacity utilization and TSM's ability to charge top dollar for advanced node production drive these better margins.

How the Stock Has Performed

TSM shares have gained 37% over the past three months, trading near $232 within a 52-week range of $133.57 to $237.58. The stock's strong performance shows the market believes in the company's execution and future prospects.

Analyst coverage remains bullish, with 11 analysts maintaining an average rating of 4.64 out of 5 (Strong Buy). The consensus price target of $243.75 suggests modest upside from current levels, with individual targets ranging from $175 to $270.

What to Watch When TSM Reports

Several elements will shape how the market reacts to TSM's earnings:

• Advanced Node Progress: TSM's 3nm and 5nm production capacity serves high-margin customers developing processors for data centers and mobile devices. Better utilization rates and yields at these nodes mean higher profits.
• Pricing Dynamics: The company's ability to keep prices high shows how little competition exists in advanced manufacturing. Any commentary on where prices are headed will signal competitive positioning versus Intel's foundry ambitions.
• Customer Diversification: While Apple remains a major customer, growth from data center chip designers spreads the risk around. Revenue mix shifts provide insight into end-market demand.
• Geopolitical Considerations: Cross-strait relations create ongoing uncertainty, though TSM's technological leadership and deep customer relationships have weathered previous storms.
• Capital Allocation: With massive expansion underway, management's commentary on spending efficiency and expected returns will shape investor thinking.

TSM's unique position manufacturing the world's most advanced semiconductors creates both opportunity and volatility around earnings announcements.

Trading TSM Earnings With Leveraged ETFs

TSM stock often experiences volatility after reporting quarterly results, giving traders who position correctly the chance for solid gains. Direxion's Single Stock Daily Leveraged & Inverse ETFs let traders amplify these moves or bet against the stock without traditional short-selling* constraints.

Bullish Approach: TSMX

Direxion Daily TSM Bull 2X Shares (TSMX) allows traders to double their exposure to TSM’s daily movements. TSMX seeks daily investment results, before fees and expenses, of 200% of the performance of TSM.

• Targets 200% of TSM's daily performance
  • When TSM rises 1%, TSMX aims for a 2% gain (before fees)
  • When TSM falls 1%, TSMX typically drops 2% (before fees)
• Works for traders expecting positive earnings surprises or strong guidance
• Semiconductor stocks often see large moves following quarterly reports
• Average daily volume: 422,000 shares
• Designed for active traders who monitor positions closely

Bearish Positioning: TSMZ

Direxion Daily TSM Bear 1X Shares (TSMZ) provides inverse exposure to TSM without requiring short-selling. This feature is especially valuable to traders with retirement accounts where IRA and 401(k) rules prohibit traditional short positions. TSMZ seeks daily investment results, before fees and expenses, of -100% of the performance of TSM.

• Delivers inverse (-1X) daily performance compared to TSM
  • When TSM drops 1%, TSMZ aims for a 1% gain (before fees)
  • When TSM rises 1%, TSMZ typically falls 1% (before fees)
• Allows traders to bet against TSM or hedge existing semiconductor positions
• Gives retirement account holders a compliant way to trade bearish views
• Average daily volume: 5,900 shares

Both TSMX and TSMZ reset exposure daily and work best as short-term trading vehicles rather than long-term investments. These products require active management and are designed for traders who understand leverage effects and daily rebalancing dynamics.

Taiwan Semiconductor's Q2 earnings could move semiconductor stocks broadly. These products give experienced traders tactical tools to capitalize on TSM's earnings-driven volatility.

*Short-selling is a trading strategy where investors borrow shares and sell them, hoping the stock price will fall.

To learn more about all Direxion's Single Stock Leveraged and Inverse ETFS, Click Here

Investing in the funds involves a high degree of risk. Unlike traditional ETFs, or even other leveraged and/or inverse ETFs, these leveraged and/or inverse single-stock ETFs track the price of a single stock rather than an index, eliminating the benefits of diversification. Leveraged and inverse ETFs pursue daily leveraged investment objectives, which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying stock’s performance over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. The Funds will lose money if the underlying stock’s performance is flat, and it is possible that the Bull Fund will lose money even if the underlying stock’s performance increases, and the Bear Fund will lose money even if the underlying stock’s performance decreases, over a period longer than a single day. Investing in the Funds is not equivalent to investing directly in TSM.

An investor should carefully consider a Fund’s investment objective, risks, charges, and expenses before investing.  A Fund’s prospectus and summary prospectus contain this and other information about the Direxion Shares.  To obtain a Fund’s prospectus and summary prospectus call 866-476-7523 or visit our website at direxion.com.  A Fund’s prospectus and summary prospectus should be read carefully before investing.

Direxion Shares Risks – An investment in a Fund involves risk, including the possible loss of principal. Each Fund is non-diversified and includes risks associated with a Fund concentrating its investments in a particular security, industry, sector, or geographic region which can result in increased volatility. A Fund’s investments in derivatives such as futures contracts and swaps may pose risks in addition to, and greater than, those associated with directly investing in securities or other investments, including imperfect correlations with underlying investments or the Fund’s other portfolio holdings, higher price volatility and lack of availability. As a result, the value of an investment in a Fund may change quickly and without warning.

Leverage Risk – The Bull Fund obtains investment exposure in excess of its net assets by utilizing leverage and may lose more money in market conditions that are adverse to its investment objective than a fund that does not utilize leverage. A total loss may occur in a single day. Leverage will also have the effect of magnifying any differences in the Fund’s correlation with TSM and may increase the volatility of the Bull Fund.

Daily Correlation Risk – A number of factors may affect the Bull Fund’s ability to achieve a high degree of correlation with TSM and therefore achieve its daily leveraged investment objective. The Bull Fund’s exposure to TSM is impacted by TSM’s movement. Because of this, it is unlikely that the Bull Fund will be perfectly exposed to TSM at the end of each day. The possibility of the Bull Fund being materially over- or under-exposed to TSM increases on days when TSM is volatile near the close of the trading day.

Daily Inverse Correlation Risk – A number of factors may affect the Bear Fund’s ability to achieve a high degree of inverse correlation with TSM and therefore achieve its daily inverse investment objective. The Bear Fund’s exposure to TSM is impacted by TSM’s movement. Because of this, it is unlikely that the Bear Fund will be perfectly exposed to TSM at the end of each day. The possibility of the Bear Fund being materially over- or under-exposed to TSM increases on days when TSM is volatile near the close of the trading day.

Taiwan Semiconductor Manufacturing Co., Ltd. Investing Risk – TSM faces risks associated with the highly competitive nature of the semiconductor industry; economic and market uncertainty; reductions in demand for its products; potential concentration of revenues in a few large clients as among other risks.

Semiconductor Industry Risk – Semiconductor companies may face intense competition, both domestically and internationally, may have limited product lines, markets, financial resources or personnel and may face risks related to the availability of materials.

Information Technology Sector Risk — The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation, and competition, both domestically and internationally, including competition from competitors with lower production cost.

Additional risks of each Fund include Effects of Compounding and Market Volatility Risk, Derivatives Risk, Counterparty Risk, Rebalancing Risk, Intra-Day Investment Risk, Industry Concentration Risk, Market Risk, Indirect Investment Risk, and Cash Transaction Risk. Additionally, for the Direxion Daily TSM Bear 1X Shares, Shorting or Inverse Risk.  Please see the summary and full prospectuses for a more complete description of these and other risks of a Fund.

Distributor: ALPS Distributors, Inc.

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