AI Boom Drives Taiwan Profits to Record as Investors Scrutinize Valuations

A global buildout of artificial-intelligence computing infrastructure has boosted demand across Taiwan’s chip, server and component supply chains. Full utilization at advanced semiconductor production lines helped listed companies post record first-half earnings, reinforcing Taiwan’s central role in the global AI hardware ecosystem. The profit surge has also provided fundamental support for the equity rally, with AI-linked businesses accounting for a large share of the market’s growth.

The latest report cautioned that Taiwan equities face two vulnerabilities: an elevated market price-to-earnings ratio and a heavy concentration of profits in AI-related companies. With expensive shares exposed to a correction if growth disappoints, investors are being urged to pair verified earnings strength with ownership data, particularly the proportion held by investors controlling at least 1,000 lots. That screen identified 18 growth stocks considered to have stronger fundamental and shareholder support.