TSMC earnings-call risk language vs. return
Does more cautious management language on quarterly earnings calls predict TSM underperformance?
Key finding: heavier risk/uncertainty language on TSMC earnings calls lines up with weaker 5-day returns (r = −0.52, excluding the Q1 2025 tariff-pause outlier). Q2 2024 (H20-ban language, risk 20%) and Q3 2025 (prudent-planning language, risk 22%) each preceded 5-day declines of 4–6%.
Risk score = risk/uncertainty mentions ÷ (risk + demand mentions) per call.
Transcripts: full Motley Fool (2024), retrieved call excerpts (early 2025), LSEG/SEC 6-K quotes (late 2025–2026). TSM ADR closes.
Earnings calls leak information the headline numbers don’t. This study scores nine quarters of TSMC earnings calls (Q1 2024 – Q1 2026) for how heavily management leaned on risk and uncertainty language, much of it tied to US–China pressure: the H20 export ban, China export controls, and tariff uncertainty, then tests whether that tone predicts how TSM trades afterward.
It does. More cautious language lines up with weaker forward returns, and the relationship is stronger over five days than one (r ≈ −0.52 vs −0.38, excluding one outlier). The market digests tone over days, not instantly. The two quarters with the heaviest geopolitical risk language, Q2 2024 (H20 ban) and Q3 2025 (prudent planning), both preceded 5-day declines of 4–6%.
The clear exception is Q1 2025: risk language spiked to 28% yet TSM rallied +8.9% over five days, because the 90-day US tariff pause announced April 22 sparked a broad market rally that swamped the signal, a reminder that a language edge still sits inside the macro tape.
- Risk score: risk/uncertainty keyword mentions ÷ (risk + demand mentions) on each call.
- Sources: full Motley Fool transcripts (2024), retrieved call excerpts (early 2025), and LSEG/SEC 6-K quotes (late 2025–2026).
- Returns: TSM ADR closing prices, 1-day and 5-day forward from each call.