- .TWII could reach 30,000 points in 2026 after growing 22% this year to date
- TSMC shares are up 39% year-to-date, largely unaffected by AI chip bias
- Experts warn that many portfolios are still too reliant on AI
Investors appear undeterred by threats of an “AI bubble” in Taiwan as the benchmark index (.TWII) approaches 30,000 points in 2026, with the market value doubling over the past three years or so.
Analysts largely agree that Taiwan is in a win-win position when it comes to AI, as it provides many of the critical components associated with AI architecture.
For example, Taiwan Semiconductor Manufacturing Company (TSMC) benefits whether or not the world favors Nvidia GPUs, Google TPUs, or other alternatives.
Taiwan could be at the forefront of the AI wave
TSMC shares are up 187% over five years and 39% this year already to date. Sector valuations are also generally considered reasonable, with Taiwan’s market P/E around 21, which is lower than the Nasdaq and Nikkei. This healthy figure ultimately helps ease concerns about an AI bubble.
The growth of AI and cloud is also far from over, with hyperscalers like Amazon, Google and Microsoft poised to spend more over the next two years, strengthening Taiwan’s manufacturing industry.
Despite international concerns about an AI bubble, local sentiment remains positive – with Taiwanese stocks up around 22% this year so far – in line with the Nasdaq. Still, foreign investors offloaded about NT$533.8 billion in 2025 due to trade uncertainty, AI risk concerns and profit-taking, according to PK Press Club report.
And it looks like things are unlikely to change in the near future, with Taiwan’s winning formula (created largely through TSMC’s influence) difficult to replicate.
Yet even though Taiwan has allayed some concerns about a looming AI bubble, strategists warn that Asian portfolios are too concentrated around AI deals, particularly TSMC, which would amplify the effects of any market fluctuations.
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