Trump's 'TACO' Move Sparks AI Stock Rally? What to Buy Ahead of Key Midweek Turnaround

‘Will Taiwan stocks crash again this week?’ ‘Has the AI rally ended?’ ‘Should I sell my holdings now?’ These were the most common questions investors asked Jiang Jiang over the weekend. I know many of you are anxious, even losing sleep. Today, Jiang Jiang is here to help steady your nerves amid the market storm.

Trump is ‘TACO’ again! With tensions cooling, where is the bullish底气 (confidence) coming from?

In investing, the biggest fear is self-inflicted ‘ghost stories.’ But now, the once-heated U.S.-Iran situation has been defused by Trump’s ‘TACO’ move—America has temporarily halted airstrikes on Iran. What does this mean? Simple business logic: reduced war threat means oil prices won’t spike, and inflation expectations will ease.

The market’s biggest fear—uncertainty—is decreasing. As long as panic-driven rate hike and inflation expectations subside, capital pulled from equities may start flowing back. This is what I call ‘long bull, short bear.’ Trump is fundamentally a long-term bull for the stock market. He understands how crucial a rising market is to his political image and personal gains. In past interviews, he even stated that his stock profits come from a strong overall market—when the market wins, everyone wins. This is a key signal: he’s using market sentiment to accumulate cheap shares, but his ultimate goal remains upward momentum. So, instead of panicking, you should calmly observe technical signals.

Taiwan Stock Strategy: The 123 Rule + Two Key Signals to Capture the Rebound

This week’s ‘Anchoring Point’ is 43,076. Memorize this number. As long as the index holds above this level, bulls have the confidence to challenge the quarterly line at 44,000 and even the monthly line at 45,280. If you’re waiting for confirmation of a ‘major rebound,’ watch these two key indicators:

- Daily MACD turns positive (red): This is the most important signal for a sustained upward move. - Valid gap: If a gap forms and isn’t filled, it’s a strong confirmation of a bottom.

Also, apply the ‘123 Rule’: 1. Breakout, 2. Pullback, 3. Attack. The Taiwan market is now at a critical juncture, breaking the pattern of ‘lower highs, lower lows.’ Once the 123 reversal completes, a strong rally could begin after Wednesday. TSMC (2330-TW), the ‘National Treasure Stock,’ is the key indicator. If it holds support at 2,290 and regains the monthly line (~2,410), the market could replicate the strong rebound seen in April.

Three Key Groups Accumulating AI’s Next Wave

When the broader market is ‘wrongly sold off’ due to geopolitical fears, large players and institutions do one thing: buy more. Focus on stocks with strong institutional accumulation:

Foreign Investor Favorites: Zhi Shang, Bo Zhi

Zhi Shang (8112-TW) As Taiwan’s largest Samsung Electronics distributor, it directly benefits from the AI-driven surge in high-end memory (HBM) and enterprise SSD demand. With memory prices continuing to rise, its profit moat comes from its dominant supply chain position and large inventory gains. EPS growth potential is extremely strong.

Bo Zhi (8155-TW) Specializes in high-end server and industrial PC PCBs. Benefiting from NVIDIA’s (NVDA-US) new platform transition, demand for high-layer-count boards is surging, driving gross margins higher. Its fundamentals are exceptionally clean, making it a core beneficiary of the AI server hardware buildout.

Institutional Fund Buys: Hwa Shine Kwang, Nan Ya PCB, Lian Ya, Ya Hsiang

Hwa Shine Kwang (4979-TW) A core player in co-packaged optics (CPO) technology. As data transmission shifts from copper to fiber, it’s the top choice for optical interface upgrades. Institutional funds are actively building positions, anticipating explosive growth in 800G high-speed optical transceiver modules. Its technological barriers are high.

Nan Ya PCB (8046-TW) As AI PCs and servers demand larger, more complex ABF substrates, the worst is behind. The current low base and rising capacity utilization are why institutions see a full operational turnaround in the second half, reigniting profit momentum.

Lian Ya (3081-TW) A leading upstream epitaxial wafer maker in optical communications. Benefiting from cloud giants expanding computing power, demand for high-end laser sources is soaring. Lian Ya’s unique edge lies in its dominant indium phosphide (InP) technology—the ‘ticket’ to enter the CPO space—with long-term profit upside.

Ya Hsiang (6139-TW) Benefiting from advanced semiconductor process expansions and large engineering orders, its backlog is at a record high. Profit growth comes from high-margin cleanroom construction and engineering projects, giving its stock strong defensive and offensive flexibility.

Major Trader Holdings: Hwa Shine Kwang, Po Lo Wei, Chien Tse, Guang Sheng, Chuan Hsin

Po Lo Wei (3163-TW) The leader in passive fiber optic components. With AI data centers being built at scale, demand for配套 (supporting) optical transceiver modules is exploding. Major traders continue to accumulate, betting on its WDM (wavelength division multiplexing) technology’s monopoly advantage in data center upgrades—strong revenue breakout potential.

Chien Tse (3653-TW) A major manufacturer of heat spreaders and lead frames. AI chips consume massive power, making thermal efficiency critical. Chien Tse holds patents and high technical barriers in ILM (interposers) and advanced heat spreaders, making it an indispensable long-term partner for major server OEMs.

Guang Sheng (6442-TW) The leader in optical communication connectors, with consecutive record highs in revenue and EPS. Major traders value its high market share in AI data center cabling, sustained high margins, and strong profit breakout potential—making it a classic long-term growth stock.

Chuan Hsin (2455-TW) A leading gallium arsenide epitaxial wafer maker in compound semiconductors. Benefiting not only from a recovering smartphone market but also from entry into optical communications and LiDAR. With 5G and AI applications as dual engines, it has a solid moat and rising profitability.

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Source: Moore Investment Consulting – Analyst Kenny Chiang

The company has no improper financial interests in the securities recommended or analyzed. Past performance does not guarantee future profits. Investors should make independent judgments, conduct careful evaluations, and bear investment risks on their own.