AI‑driven hardware boom lifts Taiwan and Japan stocks as bubble and geopolitics raise concerns

Taiwan's AI surge is projected to push the economy toward a 10% growth rate, driven by its strong position in AI hardware. Experts warn that the capital market is becoming overly tilted toward AI firms, creating a risk of an AI‑related bubble and inflated valuations. Geopolitical tensions between the United States and China add further uncertainty, with potential export controls and supply‑chain disruptions that could affect Taiwan’s role as a critical AI hub.

In Japan, BNP Paribas Asset Management released an investment outlook stating that AI‑led growth will continue to support equity markets through the second half of 2026. The report highlights that technology‑hardware stocks have outperformed, delivering global gains of more than 50% compared with other sectors. While some analysts raise bubble concerns, earnings growth remains solid, and no major layoffs have materialised. The outlook also notes that Middle‑East tensions have eased, limiting their impact on markets.

Both pieces underscore that, although AI is fueling strong market performance, investors should monitor valuation risks, geopolitical developments, and the need for diversified exposure across sectors.