Bulls Return? Taiwan Stock Market Soars 3,186 Points! What to Buy This Week?

On last Friday, U.S. stocks closed higher across the board, with the Dow Jones rising approximately 277 points, the S&P 500 up 0.7%, and the Nasdaq gaining 1%. Apple (AAPL-US) reported revenue and profits exceeding expectations, but its stock plunged 7% due to rising costs in memory, wafer foundry, and passive components, raising market concerns over declining gross and operating margins in the next quarter. However, this also confirms that AI hardware demand remains strong, as Amazon, Google, and Microsoft continue to increase capital expenditures—AI remains a long-term dominant trend.

Short-term market sentiment remains affected by U.S.-Iran tensions and a sharp decline in memory stocks. On Saturday, Trump threatened a strong attack on Iran, but on Sunday agreed to cancel the strike in exchange for an agreement, indicating neither side wants to escalate the conflict. Coupled with U.S. public opposition to war expansion, the short-term clash appears more like a negotiation tactic, with a potential resolution still possible.

The plunge in South Korean memory stocks was not due to deteriorating fundamentals, but rather excessive investor leverage and concentrated capital triggering panic selling. Global cloud giants continue to expand AI-related capital spending, and memory demand may outstrip supply until 2028. Japan’s Kioxia has announced an 800 billion yen share buyback, and more companies may follow, helping stabilize memory stocks. As war risks and selling pressure subside, global equities have room to return to a bull market.

Taiwan's stock market surged 3,186.45 points last Friday, recording the largest single-day gain in history, closing at 43,119.75. Heavyweight stocks such as TSMC (2330-TW) and MediaTek (2454-TW) hit their daily trading limits, with the three major institutional investors collectively buying NT$84.676 billion, including NT$67.554 billion from foreign investors. This indicates that margin call liquidations, deleveraging, and panic selling have largely ended, and capital is rapidly returning. Taiwan's GDP growth rate this year is expected to reach 11%, with solid fundamentals. Technically, Friday’s surge is a bullish reversal signal, suggesting the market may rise with volatility and challenge the 50,000-point level again. Maintaining a long position remains the core strategy.

This week, focus on AI cloud, server, and memory stocks—but differentiate between strong and weak performers. AWS’s rapid growth benefits the supply chain, including Hon Hai (2317-TW), Quanta (2382-TW), Wistron (3231-TW), Wiwynn (6669-TW), and Taishin Electronics (2383-TW). For memory, monitor Nanya Technology (2408-TW), Winbond Electronics (2344-TW), and Phison Electronics (8299-TW). However, Micron (MU-US) surged 18% before falling 5.9%, reminding investors of high short-term volatility—avoid chasing highs. Maintain the strategy of 'selling high, buying low, rotating from weak to strong stocks,' buying in stages on pullbacks, and prioritizing risk management over profit-taking.