Taiwan Stock Market Soars Over 1,000 Points: Is the Market Shakeout Over? Insiders Reveal 3 Key Market Observations — 'Has AI Investment Started Making Money?'

Taiwan's stock market faced epic selling pressure last Friday (17th), plunging nearly 3,000 points at closing after TSMC's earnings call sparked simultaneous concerns over AI capital spending, semiconductor valuations, and foreign fund withdrawals. The weighted index recorded the largest single-day closing drop in history. Following this 'Black Friday' shock, the market continued to fall on Monday (20th), closing down 222 points. In response, the Facebook finance page 'Stock Market Old Bull' published an analysis before Tuesday's opening titled 'Defend 42,000! See Who’s Not Wearing Pants,' highlighting three key market observations: 'The market only asks: Has AI investment started making money?' On Tuesday, Taiwan's stock market surged over 1,000 points at the opening.

After the historic drop on Black Friday, how did the market perform on Monday? Market volatility intensified in July. After last Friday's 6.47% plunge (closing at 42,671.27 points), panic sentiment surged. On the 20th, the market initially rebounded alongside U.S. futures and stocks, surging over 400 points and reclaiming the 43,000-point level. However, deleveraging selling pressure continued, turning the market negative during the session with intraday swings exceeding 1,100 points. The weighted index closed at 42,449 points, down about 222 points (0.5%), with trading value remaining high—indicating ongoing market turnover and position cleansing.

The day after TSMC's earnings call, Taiwan's stock market faced Black Friday. (Photo: Central News Agency)

Will the market continue to fall? Can it hold the 42,000-point level on Tuesday? Regarding Tuesday's potential performance, institutions note that short-term volatility will persist as margin financing continues to shrink and foreign investor sentiment remains unclear. 'Stock Market Old Bull' first reviewed U.S. markets: on Monday, indices opened high but closed slightly negative, with only the Philadelphia Semiconductor Index rising 0.6% against the trend. TSMC's ADR also gained nearly 1%. However, the real focus for capital flows lies in the upcoming heavyweight AI earnings reports this week—'Has AI investment started making money?' remains the market's central question.

For Taiwan's market, the page noted Monday opened high but closed low, with intraday volatility again exceeding 1,000 points. The key support level to watch is the previous low of 42,006 points.

Looking ahead, 'Stock Market Old Bull' identified three key market observations:

- Weighted stock performance: TSMC halted its decline and rebounded but has not yet reclaimed its 25-day moving average - Resilient sectors: AI server stocks (Hon Hai, Wiwynn) showed relative support - Position shifts: Small and mid-cap tech stocks continue to correct, with the GreTai index falling more than the weighted index

The page concluded that capital is retreating like a receding tide, gradually revealing 'who isn’t wearing pants.' Short-term movements are news-driven, but medium-to-long-term trends depend on corporate earnings. 'Instead of guessing tomorrow’s moves, pick companies that will grow consistently over the next three years,' it advised. 'Markets fluctuate daily, but great companies don’t change in value because of one day’s movement.'

Reviewing Monday’s heavyweight performance, TSMC briefly rebounded, acting as a key market support. However, profit-taking and margin reduction selling capped gains. AI, semiconductor, and memory stocks remained volatile, with market focus centered on the post-earnings reassessment of capital spending, profit margins, and global semiconductor outlook.

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