Middle East Tensions and AI Hype Create Tug-of-War; Analysts Expect Short-Term Volatility for Taiwan Stocks

(Central News Agency, Reporter Zeng Renkai, Taipei, June 4) Fueled by the Taipei International Computer Show (COMPUTEX), the Taiwan stock market surged 901.85 points on June 3 to close at 46,459.16 points, marking a record closing high for the fourth consecutive trading day. Analysts believe AI is gradually shifting from thematic investment to a fundamental-driven long-term trend. While the long-term bullish outlook for Taiwan stocks remains unchanged, they predict short-term volatility is inevitable given the recent sharp gains. Additionally, TSMC's shareholder meeting today is a key market focus.

Renewed tensions in the Middle East led to a rebound in oil prices, sparking inflation concerns, and causing major US stock markets to pull back from their record highs on June 3. The Dow Jones Industrial Average fell 620.72 points, or 1.21%, to close at 50,687.07. The S&P 500 index dropped 56.10 points, or 0.74%, to 7,553.68.

The tech-heavy Nasdaq Composite Index declined 239.92 points, or 0.89%, to 26,853.98. However, the Philadelphia Semiconductor Index continued its strength, rising 190.69 points, or 1.39%, to a new record high of 13,916.96.

In individual stocks, NVIDIA's stock price fell $8.07, or 3.62%, to close at $214.75 on Wednesday. AMD rose $20.98, or 4.02%, to $542.52. Memory module maker Sandisk surged $115.14, or 6.71%, to $1,831.5. TSMC's ADR fell $10, or 2.24%, to $436.69.

Lou Kewang, Deputy General Manager of the Investment Strategy Department at Nomura Asset Management Taiwan, analyzed that the trends seen at this week's bustling COMPUTEX show indicate AI is moving from a technology competition centered on cloud computing power to a new stage of comprehensive physical application deployment. AI technology is gradually being embedded into the daily operations of various industries and is beginning to have a tangible impact on corporate operational efficiency and cost structures.

Lou believes that the value of AI is no longer limited to technological innovation or capital expenditure expectations but is further transforming into a measurable source of profit for companies. Once AI is integrated into core business processes, it is expected to structurally enhance profitability. He sees this structure allowing AI to gradually evolve from thematic investment to a fundamental-driven long-term trend. The growth momentum of AI technology will form a 'real tech dividend' that crosses industries and markets, with Taiwan stocks being a primary beneficiary. (Editor: Lin Jiaxian) 1150604