Taiwan Stocks Open High, Close Sharply Lower
After the four major U.S. indexes closed higher yesterday, Taiwan stocks mostly stayed above the flat line before 11 a.m. today (12th), reaching a high of 44525.24 points, then drifted lower toward midday, closing down 1165.28 points, or 2.63%, at 43091.87 points, with a high-low difference of over 1500 points.
Board News Triggers Market Selloff
In addition to the extramarital affair case involving Jensen Huang and suspected Chinese female spy Huang Le, the New York Times also disclosed that Jensen Huang was also involved with 48-year-old married Nvidia vice president of healthcare business Kimberly Powell. According to The Wall Street Journal, Nvidia's board is preparing to replace Jensen Huang, with the market also reporting that former Apple CEO Cook and others are among potential successors.
Moore Investment Advisory analyst Hsieh Chen-yen said Taiwan stocks have rebounded more than 6,000 points from recent lows, a very strong rebound. The timing of the market selloff has much to do with changes related to Nvidia's board, mainly because the market is worried that if Nvidia CEO Jensen Huang really steps down, it could further affect orders for Taiwan's supply chain, making it the main reason for recent stock market volatility. However, judging from the National Stabilization Fund entering the market to support shares, the implementation of short-selling restrictions, and export data, the AI industry development trend has not changed.
AI Trend Unchanged, Buy Blue Chips on Dips
Hsieh Chen-yen said current orders for Taiwan manufacturers mainly come from four major data center operators, including Amazon, Microsoft, Google and Meta, all of which are major customers for Nvidia chips. Even if Nvidia's expansion slows in the future, other players such as AMD and Google may rise to the occasion, giving Taiwan's supply chain an opportunity to further expand its customer base. The recent market pullback also allows share prices to test bottoms, which is not necessarily a bad thing.
Operationally, he suggested focusing first on large-cap blue chips with better fundamentals and relatively supported buying, including TSMC, MediaTek and Delta Electronics. As for investment strategy, Hsieh Chen-yen believes there is currently no need to adjust positions particularly. Economics Minister Kung Ming-hsin previously also said next year's economic outlook for Taiwan is quite positive, with the main momentum still coming from the AI industry, and foreign institutions such as Goldman Sachs and Morgan Stanley are also generally optimistic about AI development. Although the growth of the AI industry may slow, capital expenditures next year and in the coming years will continue to increase, so now is instead an opportunity to buy on dips.