Taiwan Stocks Plunge Over 1,000 Points, AI Rally Over? Institutions Name Stocks That Are Now Buying Opportunities

Selling pressure in tech stocks intensified again, causing Taiwan's stock market to open lower and extend losses today (24), plunging over 1,000 points during trading. If the market fails to stage a strong rebound by the close, it may lose the quarterly moving average line (seasonal line) once again.

PineBridge Investments noted that as global AI applications rapidly proliferate, market capital continues to focus on related industrial chains. Driven by expanding investments in AI infrastructure and growing demand for cloud services, Taiwan's technology sector is expected to continue benefiting, supporting the medium- to long-term upward momentum of the Taiwan stock market.

PineBridge stated that AI demand is expanding from chip computing power to infrastructure upgrades, driving specification enhancements and value increases across multiple supply chain segments. While the investment outlook for Taiwan stocks in the second half of 2024 remains positive, the third quarter may still experience short-term volatility due to seasonal factors and foreign investor rebalancing.

According to market research firm TrendForce's April forecast, global AI server shipments in 2024 are expected to increase by approximately 28% year-on-year, while foundry output value is projected to grow 24.8%. Additionally, the expansion of AI data centers is boosting demand for high-speed switches and high-efficiency power supplies.

Furthermore, a Reuters survey from March indicated that the liquid cooling system market is expected to grow from $8.9 billion in 2025 to $17 billion this year, highlighting that the AI industry remains in a high-growth phase.

PineBridge Investments pointed out that sustained capital expenditure by global tech giants continues to drive demand for AI data center construction, further enhancing order visibility for Taiwan's related supply chains. According to Goldman Sachs' July statistics, Taiwan's stock market rose over 60% year-to-date in the first half of 2024, with more than 85% of the gains attributed to corporate earnings growth and upward revisions in earnings expectations—not merely valuation expansion—indicating that the current rally remains fundamentally supported.

Zheng Zhuwen, Deputy General Manager of PineBridge's Investment Strategy Department, noted that historical trends show the Taiwan stock market tends to be relatively volatile from August to September, and foreign investors typically rebalance their portfolios between May and September. However, for active investors, short-term fluctuations should not be viewed with excessive pessimism. If fundamentally sound stocks pull back due to market sentiment, it offers an opportunity to reassess corporate value and create strategic, long-term, phased investment entries.

Looking ahead, Gao Haozhi, portfolio manager of the PineBridge Giants Fund, emphasized that AI remains the most important investment theme in the global technology industry, with the long-term growth trend unchanged. Demand is shifting from training to inference and continues to spread into infrastructure areas such as advanced processes, high-end materials, thermal management, high-speed networking, and power management.

Gao Haozhi pointed out that Taiwan possesses a complete and competitive industrial cluster in semiconductor manufacturing, IC design, advanced packaging, server assembly, and electronic components, positioning it to continue benefiting from the global AI investment wave. He recommended sustained attention to investment opportunities in related supply chains and beneficiary sectors.