Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) just delivered a quarter that Wall Street won't soon forget – but you wouldn't know it by looking at the stock chart.

The chip giant crushed first quarter estimates, powered by AI-hungry demand for its 3nm and 5nm chips, yet shares continue to short-circuit.

Strong Fundamentals, Stronger Headwinds

First quarter revenue surged 41.6% year-over-year to $25.53 billion, topping expectations of $23.92 billion. EPS came in at $2.12, well above the $1.82 consensus. TSM also projected second quarter revenue between $28.4 billion and $29.2 billion, bolstered by continued strength in AI processor demand – think Nvidia Corp‘s (NASDAQ:NVDA) GPUs and Apple Inc's (NASDAQ:AAPL) iPhones.

As Direxion's Head of Capital Markets Jake Behan put it: "TSM's strong results, driven by its critical supplier role to Nvidia, signal strength ahead of a pivotal semiconductor earnings season….TSM’s strong earnings and sustained capex plans position it as a bellwether, signaling continued AI-driven demand – a bullish signal for the sector."

But don't cue the victory music just yet.

Read Also: Nvidia, Meta And 3 More Stocks Are This Strategist’s Top Buys: Here’s Why

TSM Stock Chart Is Flashing All Red Lights, A Death Cross

Chart created using Benzinga Pro

Despite the stellar report, TSM stock is flashing technical warning signs all over the board. At $151.74, it's trading below its eight, 20, 50 and 200-day simple moving averages (SMAs). In trader speak, that's a bearish signal coming from every major trend line. The 50-day SMA stands at $177.31, and the 200-day SMA is way up at $183.96 – have recently made a Death Cross.

"A pre-tariff buying rush may have padded TSM's bump in sales, which raises the question of whether short-term strength could mask longer-term softness," warned Behan.

Volatility, Thy Name Is Semis

With trade war chatter and tariff jitters looming large, even the best earnings might not be enough to keep the rally going. As Behan notes: "Headline risk continues to be a key headwind for the semiconductor sector."

For investors looking to play the volatility, investors may look at the Direxion Daily TSM Bull 2X Shares (NASDAQ:TSMX) (2x daily return) and the Direxion Daily TSM Bear 1X Shares (NASDAQ:TSMZ) (-1x daily return) to ride the waves – or shield from them.

TSM's fundamentals are flexing, but the charts are trembling. AI demand is hot, but trade risks and technical pressure may leave the stock stuck in the cooling chamber.

Read Next:

• Nvidia, AMD Take A $17 Billion Hit In The AI Arms Race, While Broadcom Remains Shielded, Says Analyst

Image: Shutterstock/Jack Hong