An AI wave has boosted Taiwan’s stock market capitalization to over $4 trillion, surpassing the U.K. to become the world’s seventh-largest.

Taiwan’s stock market has seen total market value break past the $4 trillion mark, driven strongly by demand for artificial intelligence, overtaking the UK to become the world’s seventh-largest stock market. With TSMC’s share price setting a new all-time high again, the weighted index surged 1.12% to close above 37,132.02 points today. This month’s gain is as high as 16%, and market confidence in Taiwan’s AI hardware supply chain continues to build.

Taiwan stocks set a new all-time high again! $4.14 trillion in market value officially surpasses the UK

In a report by Bloomberg, as of this past Wednesday, Taiwan’s stock market total market value had risen to $4.14 trillion, officially surpassing the UK’s $4.09 trillion and moving up to become the world’s seventh-largest stock market. This is also the second time Taiwan has refreshed its global ranking record, after earlier this year it surpassed France.

As tensions in the U.S.-Iran war situation continue to cool further, Taiwan’s weighted index successfully recouped all the losses since the outbreak of the Middle East conflict. It has become one of the major markets worldwide that was among the first to complete a rebound, and it has also further set a new all-time high by breaking past the 37,000 level. TSMC (2330) shares also rebounded in tandem to 2,085 yuan. Strong revenue growth once again underscores its irreplaceable core position in the global AI supply chain.

(TSMC and Samsung lend a hand! Tesla’s AI5 chip completes design approval, targeting mid-2027 mass production)

Taiwan stocks are seen as a top investment choice for AI hardware

So far this month, Taiwan’s weighted index has risen 16%. On Thursday, it was up another 0.7% at one point during the trading session, extending its streak for eight straight trading days and setting the longest consecutive winning streak record since 2025. Yoon Ng, head of Asia Pacific asset management growth at Broadridge Financial Solutions, said:

Taiwan continues to be viewed as a core role in the AI supply chain. As long as AI capital expenditure momentum stays intact, inflows of funds should continue to provide support.

Despite International Monetary Fund estimates for 2026 that Taiwan’s economic size of $977 billion is far smaller than the UK’s $4.3 trillion, the booming development of AI-related product exports is continuing to raise outside expectations for Taiwan’s overall economic growth.

UK stocks constrained by sticky high inflation and interest-rate pressures, gains lagging clearly

By contrast, in the UK, the FTSE 100’s month-to-date gain is slightly less than 4%, and it has continued to be held back by factors such as sticky inflation and interest rates that remain higher than in other parts of Europe. Even so, UK stocks have not fully lost market favor. In an environment where geopolitical uncertainty is rising, energy and defensive sectors account for nearly one-fifth of the UK stock market’s value, giving them some appeal as a hedge.

Strategy analysts at firms such as Barclays and Citigroup continue to recommend the FTSE 100, positioning it as a defensive tool or a priority allocation option under geopolitical risk. HSBC strategist Duncan Toms looked back at the period of global stagflation in 2022, when the UK was one of the brightest-performing markets globally:

With a high weighting in the UK market of commodity-linked sectors such as energy and basic materials, it is expected to benefit from elevated trends in energy and metal prices.

UK stock valuations rebound, but fund de-risking remains generally prevalent

Bank of America’s latest April survey shows the UK has risen to become Europe’s second-most preferred market, behind only Switzerland, representing a notable improvement from second-to-last in February. However, for now, about 16% of global fund managers still lean toward reducing exposure to UK stocks, slightly higher than the 15% in the prior month.

By comparison, with Taiwan stocks seeing continued expansion in AI capital expenditures, strong performance from tech bellwethers led by TSMC, and multiple positives as geopolitical tensions gradually ease, there is still hope that strong performance can be maintained in the short term. The market broadly believes that as long as global AI infrastructure investment momentum does not fade, Taiwan’s position as a key hardware supply-chain hub will continue to support foreign investors’ willingness to make long-term allocations to Taiwan stocks.

This article on the AI wave lifting Taiwan’s stock market value past $4 trillion and surpassing the UK to enter the world’s seventh place first appeared on Lianxin ABMedia.