TSMC fuels AI stock rally and retail margin boom in Taiwan

Retail investors in Taiwan have sharply increased borrowing to chase AI‑related stocks, especially Taiwan Semiconductor Manufacturing Co. (TSMC) and its suppliers. The surge in margin financing has lifted household portfolios but raised concerns of a bubble, as analysts warn that a reversal in AI chip demand could trigger forced selling and broader market instability.

At the same time, Citi reaffirmed TSMC’s strong growth outlook, raising its price target and maintaining a buy rating. The firm expects continued robust demand for advanced AI chips, higher wafer pricing, and benefits from TSMC’s scale and advanced packaging capabilities, reinforcing the company’s position as a leading AI stock on Wall Street’s radar.