Taiwan's stock market overtook India as the world's fifth largest on May 25, 2026, reaching a total capitalization of $4.95 trillion, compared with India's $4.92 trillion [1]. This shift reflects surging investor interest amid the global AI boom that has boosted Taiwan's technology manufacturing sector.
Taiwan Semiconductor Manufacturing Company (TSMC) played a central role, with its shares rising 49% this year and comprising about 42% of Taiwan's weighted stock index [1, 2, 3]. Between June 2025 and early June 2026, TSMC's stock price more than doubled from 950 to 2425 New Taiwan dollars [2, 3]. TSMC Chairman Wei Zhejia said, "We continue to see wider adoption of AI models across consumers, enterprises, and sovereign AI," which is fuelling demand for advanced semiconductor chips that drive the company's strong growth [2]. He expects revenue growth over 30% this year and dismissed competitor Samsung's claims to catch up as "daydreams," noting Taiwan's ecosystem cannot be easily replicated [3].
The AI surge has also lifted South Korea's Kospi index, which surged past 8,000 points for the first time on May 15, led by Samsung Electronics and SK Hynix benefiting from AI infrastructure demand [4]. However, recent foreign investor selling suggests concerns about long-term earnings sustainability in the sector [4].
NVIDIA's CEO Jensen Huang announced plans on May 27 to increase annual investment in Taiwan to $150 billion and grow its local workforce to 4,000 employees, calling Taiwan the "center of the AI revolution" [5, 6]. Huang also stressed the importance of generous employee compensation amid industry pressures [7].
In contrast, India’s stock indices have declined 8% in 2026 due to rising energy costs and slower corporate profit growth amid shifting foreign investment [1]. Despite this, the IMF estimates India's economy remains larger, with GDP at about $4.15 trillion compared to Taiwan's $977 billion [1].
Global equity markets face broader volatility from geopolitical tensions, including stalled U.S.-Iran peace talks weighing on oil prices and inflation expectations [8, 9, 10, 11]. A June 4 selloff in chip stocks followed Broadcom's disappointing AI chip sales guidance, tempering the U.S. AI stock rally [10, 11].
Some analysts see the AI spending surge as sustainable, with Fidelity portfolio manager Ian Samson noting, "there is good visibility that the end is not imminent" [4]. Others, like Bridgewater founder Ray Dalio, warn the AI rally shows bubble characteristics, with future returns uncertain [10].
TSMC held its annual shareholder meeting on June 4, where Chairman Wei invited investors to "continue buying shares" amid strong growth prospects and ongoing capital expenditure to meet demand [2, 3]. The next key market data is expected with Taiwan’s mid-2026 earnings reports later this year.
