(Bloomberg) — Taiwan’s benchmark stock index rose to an all-time high in Japan and China, as expectations for a surge in demand for artificial intelligence technology drove investor sentiment.
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ThaiEx rose as much as 3.5%, surpassing its January 2022 high as markets reopened after more than a week of Lunar New Year holidays. Much of the gain came from a 9.8% jump in Taiwan Semiconductor Manufacturing Co., Taiwan’s largest stock and a major provider of Nvidia Inc.’s foundry services.
The new high comes as investors continue to flock to the AI theme, pushing up stock prices for chipmakers and other tech companies globally. The Philadelphia Stock Exchange’s semiconductor index recently hit a new all-time high, and Nvidia’s market capitalization has soared to about $1.82 trillion, surpassing Amazon.com and Alphabet.
TSMC outlook confirms hopes for global technology recovery in 2024
TSMC, which accounts for about 30% of Taiex, reported a 7.9% year-on-year increase in sales in January over the holidays. Last month, company executives met with Nvidia CEO Jensen Huang to discuss supply constraints for AI chips, a major challenge for the AI boom.
“Taiwan has been driven by technology, especially AI themes,” said Xin Yao Ng, Asia equity investment director at abrdn. “After Jensen Huang’s visit to Taiwan, NVIDIA became a catalyst for further momentum, increasing investor appetite for AI his value chain strategy and his NVIDIA suppliers.”
The lure of further gains in TSMC and other tech stocks has led to an influx of cash from overseas investors. Foreign funds have bought about $14 billion worth of Taiwan stocks on a net basis since the end of October, according to data compiled by Bloomberg.
–With assistance from Jenny Yu.
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