Who Does Number Two Work For?

With a little over one week until NVIDIA reports earnings, it is completely understandable that the buildup to it will continue to be dramatic. After all, we are talking about the largest, most prominent stock at the epicenter of the Nasdaq/AI/semiconductor melt-ups all rolled into on ticker. We also have a high profile, black leather jacket-wearing CEO signing his John Hancock on suggestive female body parts amid a valuation which had even the the most rigorous fundamentals-driven investors throwing caution to the wind to chase it up so as to keep pace with peers in a cutthroat industry. 

As a result, NVDA earnings will, without a doubt, be the cherry on top next week to summer trading before we take off for Labor Day break. 

But we ought not overlook the number two name in the semiconductor sector in terms of market capitalization behind NVDA. And that, of course, would be Taiwan Semiconductor Manufacturing ADR (TSM). 

At roughly $900 billion in market cap, TSM is certainly not small potatoes. 

On the updated daily chart, below, TSM's recent surge along with most semis and tech, has it forming a potentially bearish right shoulder (highlighted) of a summer-long topping process. The struggle between the "new highs a-comin'" bulls and the "last gasp rally" bears may very well be illustrated best with this chart, in addition to other prominent chips like AVGO and KLAC sporting similar patterns. 

Still, TSM is the number two overall name by market cap and is also clearly a geopolitical hot button name, as China/Taiwan tensions always seem to lurk in the background.