Taiwan’s main index pushed past its previous peak on Tuesday, driven by a renewed appetite for artificial‑intelligence stocks that had faded after the Iran‑Israel conflict escalated. Investors swapped defensive holdings for semiconductor‑heavy names, betting that technology firms will benefit if geopolitical tensions ease. The rally lifted the weighted index by roughly 1.2%, matching the strongest session since early 2022, establishing a record high.

Market participants revived the pre‑war playbook that favored high‑growth AI plays, a strategy that had been sidelined when oil‑price spikes and supply‑chain concerns diverted capital. With diplomatic overtures emerging, traders anticipate a window for earnings upgrades, prompting renewed buying in firms like MediaTek and Taiwan Semiconductor Manufacturing Co.

The surge not only reset market sentiment but also underscored Taiwan’s reliance on AI‑related export demand. Hedge funds that had trimmed exposure are now rebuilding positions, betting that a de‑escalation in the Middle East will sustain the upside. Investors should watch volume spikes for clues on the durability of the rally, which could deliver a short‑term boost for tech‑heavy portfolios.

Analysts at local brokerages note that the rally’s breadth, encompassing both chipmakers and AI software vendors, may attract foreign inflows, reinforcing Taiwan’s role as a key node in the global AI supply chain. Such capital could also buoy the domestic bond market, easing financing costs for exporters.