Taiwanese Stocks Hit Record High as AI-Driven Trading Systems Rebound
Taiwanese Stocks Reach New Record Amid Easing Tensions in the Middle East
Taiwanese stocks rose to a new record on Tuesday, driven by investor hopes for easing tensions in the Middle East and a continued surge in demand for artificial intelligence (AI) shares. The Taiex Index advanced as much as 1.9% in early trading, surpassing its previous intraday record on February 26.
The benchmark Taiex Index has gained about 25% this year, outpacing the MSCI Asia Pacific Index's 9.7% increase. The index's latest gains helped erase all its losses since the war started at the end of February, when global AI stocks were battered due to concerns about soaring energy costs and supply disruptions.
Shares of Taiwan Semiconductor Manufacturing Co., the sole chipmaker for Nvidia Corp.'s advanced AI accelerators and Apple Inc.'s iPhone processors, jumped as much as 1.8%. The company reported a 35% increase in quarterly revenue last week, suggesting global AI chip demand remained intact during the first weeks of the Iran war. Taiwan Semiconductor Manufacturing Co. is scheduled to report full first-quarter earnings on April 16.
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The latest gains are a testament to the growing importance of Taiwan in the global AI ecosystem. Analysts at Sanford C. Bernstein note that the strong earnings cycle and a return to momentum chasing have driven strong assessment upgrades for Taiwan and South Korea's tech stocks.
Comparison of Taiex Index Performance
| Index | 2024 Performance |
|---|---|
| Taiex Index | 25% |
| MSCI Asia Pacific Index | 9.7% |
The latest developments in the Middle East have also boosted investor sentiment, with the recent meeting between President Xi Jinping and Taiwan's opposition leader, Cheng Li-wun, leading to a series of policy incentives announced by Beijing for Taiwan. These incentives have further contributed to the island's stock gauge rising to new heights.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
Investor Takeaway
Investors should consider the potential for Taiwanese stocks to continue their upward trend due to the rebound in AI-driven trading systems.
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