AI Boom Fuels Taiwan Stock Frenzy as Retail Margin Financing Hits Record High

Bloomberg reported that strong demand for AI chips and a rally in Taiwan stocks have prompted retail investors to increase their equity exposure using brokerage margin financing and bank loans, rapidly driving up market leverage. Outstanding margin debt is closing in on its pre-dot-com-bubble peak, while the value of defaults has reached a record high. The figures show that the rush into AI-related stocks has also amplified the risks of market pullbacks and forced liquidations.

The latest report focused on an investor named Ba Ni Ni, who told Bloomberg that fear of missing out had led him to borrow NT$5 million to invest in Taiwan stocks. As defaults rise, brokerages have begun raising margin interest rates and tightening terms. However, the available information does not specify the report's publication date, the exact figures for outstanding margin debt and defaults, or the cutoff dates for those statistics.