TSMC (TSM) Underperforms in Q3 as Semiconductor ‘Crowded Trade’ Unwinds

What happened: Wedgewood Partners' Q3 2026 investor letter named Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as a detractor, citing a pullback after a strong rally as the semiconductor "crowded Why it matters: Wedgewood said semiconductors had become a very crowded trade in the second quarter, and much of the third-quarter underperformance reflected unwinding of those extremes. The firm trimmed TSM several times during the multi-year rally, limiting positions to 10% of portfolios, while calling the stock its best-performing holding year to date on AI-related capex spending.

Wedgewood Partners' Q3 2026 investor letter named Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) as a detractor, citing a pullback after a strong rally as the semiconductor "crowded

Wedgewood said semiconductors had become a very crowded trade in the second quarter, and much of the third-quarter underperformance reflected unwinding of those extremes. The firm trimmed TSM several times during the multi-year rally, limiting positions to 10% of portfolios, while calling the stock its best-performing holding year to date on AI-related capex spending.