Originally published in the Stock Savvy Dad newsletter on July 21, 2026.

Last week Taiwan Semiconductor (TSM) reported a 77% jump in quarterly profits.

The stock dropped anyway.

You might be wondering how that could happen. A company posts near perfect numbers and the stock declines. That doesn’t seem right but let me break down what’s going on.

As of today, TSM is up nearly 65% over the past year. When a stock is performing that well the market begins pricing in perfection before the results even come out. When perfection arrives, it’s already baked into the stock price and there’s nothing left to get excited about so investors take profits and move on. There’s nothing fundamentally wrong with the business, expectations just need to be reset.

I’m gonna keep it 100. I haven’t always handled a declining stock perfectly myself.

During the tariff selloff last spring I trimmed a tech position I believed in while it was dropping. Not because the business had changed. Because I already had a significant return and didn’t want to give back more profits than I already had. The stock bounced back and I still own shares. But that trim was partially emotional even if I can rationalize it. I knew the company was fine. Fear still moved my hand a little.

That’s one of the reasons why I like using AI as a filter before I make any move based on a headline.

When I see news about chip stocks dragging, I drop the headlines into AI and ask a simple set of questions. How will this affect the stock over the next 3-12 months and 3-5 years? Are there any notable long-term consequences to be aware of or is this primarily noise worth ignoring?

When I ran that prompt inside of Claude, the results provided clarity. The companies getting hit hardest right now are memory chip makers like SanDisk, Western Digital, and Intel. Those are cyclical businesses tied to consumer and enterprise demand. Companies like Nvidia and TSM are in a completely different category. They’re the infrastructure layer of the AI buildout and that demand isn’t going away.

For me that’s the signal to stay put. If anything, a dip in a company I’ve researched and believe in is a chance to add shares at a better price not a reason to panic.

The question every long-term investor needs to ask when headlines get loud is have there been any significant changes to the business itself?

If the answer is no, the noise is just noise.

— Stock Savvy Dad
​Invest smarter, build wealth, be a savvy dad.