- .TWII could reach 30,000 points in 2026 after 22% growth this year to date
- TSMC shares are up 39% YTD, largely unaffected by AI chip biases
- Experts warn many portfolios are still too AI-reliant
Investors don’t seem to be put off by threats of an ‘AI bubble’ in Taiwan as the benchmark index (.TWII) nears in on 30,000 points in 2026, with market value doubling over the past three or so years.
Analysts broadly agree that Taiwan is in a win-win position when it comes to AI, because it supplies many of the critical components associated with AI architecture.
For example, Taiwan Semiconductor Manufacturing Company (TSMC) benefits regardless of whether the world biases 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 to date already. Sector valuations are also generally regarded as reasonable, with Taiwan’s market P/E around 21, which is below the Nasdaq and Nikkei. This healthy figure ultimately goes a fair way to easing concerns over an AI bubble.
AI and cloud growth is also far from over, with hyperscalers like Amazon, Google, and Microsoft all set to spend more over the next couple of years, bolstering Taiwanese manufacturing.
Despite international concern over an AI bubble, local sentiment remains positive -with Taiwan stocks up around 22% this year to date – in line with Nasdaq. Still, foreign investors have offloaded about T$533.8 billion in 2025 due to trade uncertainty, AI risk concerns and profit-taking, per Reuters reporting.
And it looks like things are unlikely to change for the foreseeable future, with Taiwan’s winning formula (made largely by the influence of TSMC) hard to replicate.
Still, even if Taiwan has eased some concerns over an impending AI bubble, strategists are warning that any Asian portfolios are too concentrated around AI trades, particularly TSMC, which would amplify the effects of any market fluctuations.
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