Why is TSM's year-to-date increase continuing to expand, and why is global capital re-focusing on AI semiconductor leaders?

According to Gate TradFi market data, TSMC has risen from around $134 in April 2025 to approximately $420 in May 2026, with a cumulative increase of over 210% in the past year. Against the backdrop of significantly intensified volatility in global tech stocks, TSMC has instead gradually become one of the most robust core assets within the AI mainline. Compared to the past market focus on the recovery of consumer electronics, the core logic driving capital back into the semiconductor sector has shifted to AI data center expansion, tight supply of advanced processes, and a new cycle of capital expenditure by global cloud providers. For global capital, TSMC is no longer just a traditional foundry leader but a key infrastructure node in the AI computing power system.

This round of AI market rally differs from previous years mainly in that capital has begun to shift from “AI concept diffusion” back to “AI infrastructure certainty.” Compared to the uncertainty in AI software, AI agents, and generative applications, demand for GPUs, advanced packaging, HBM, and data centers has entered a real order phase. The market is no longer just betting on future stories but is witnessing genuine expansion in global AI capital expenditure.

TSMC Weekly Chart Recently Entered a High-Volatility Uptrend

TSMC’s weekly structure has clearly entered a trend acceleration phase.

From a technical perspective, after breaking through the previous consolidation platform, TSMC’s weekly gains have begun to significantly expand, with high-level fluctuations rising in tandem, and market sentiment gradually shifting from “institutional allocation” to “trend reinforcement.” The over 210% cumulative increase in the past year has also made TSMC one of the most dominant core assets in the global semiconductor sector today.

This structure typically indicates that the funds driving the stock price higher are no longer just short-term traders but are increasingly supported by medium- to long-term institutional capital reinforcing the AI infrastructure logic.

Compared to the initial AI rally in 2024 mainly centered around NVIDIA, current capital is more broadly re-pricing the entire AI supply chain, including advanced processes, advanced packaging, servers, power management, and data center infrastructure.

The importance of TSMC at this stage has thus evolved.

In the past, the market often regarded TSMC as an important indicator of the global consumer electronics cycle, but now, it is gradually seen as a core proxy asset for the AI capital expenditure cycle. Especially as demand for 3nm, 2nm, and CoWoS packaging remains tight, the market is re-evaluating the long-term scarcity of advanced manufacturing capabilities.

Behind the high-volatility trend, fundamentally, it reflects that market expectations for long-term AI demand are further strengthening.

Why the US Market’s AI Mainline Is Reclaiming Market Attention

The renewed enthusiasm for the AI mainline is not just a matter of sentiment recovery but signals that the global tech capital expenditure logic is re-entering an expansion phase.

Recently, US stocks’ AI rally has expanded from hardware to AI software, AI agents, and automation platforms, with large amounts of capital seeking new narratives around AI applications. But as the market gradually enters an earnings realization cycle, capital is refocusing on infrastructure companies that can truly support the growth of AI computing power.

Compared to the uncertainty at the application layer, the business logic of AI infrastructure is more straightforward.

Whether it’s training large language models or deploying enterprise AI inference, fundamentally, it requires higher-density data centers, higher-power GPUs, more advanced packaging processes, and expanding server infrastructure. This means that ultimately, competition in the AI industry will return to chip manufacturing and computing power supply.

Recent capital expenditure by global cloud providers further reinforces this trend.

Microsoft, Meta, Google, and Amazon have continuously increased their investments in AI data centers over recent quarters, boosting market expectations for long-term expansion of AI infrastructure. The current focus of capital markets is no longer just on NVIDIA GPU sales but on whether the entire AI computing power system is entering a long-term growth cycle.

In this context, it is more reasonable for global capital to reallocate funds to core AI infrastructure companies like TSMC, Broadcom, and Delta Electronics.

How Institutional Capital’s Risk Appetite Is Changing

Global institutional capital’s allocation logic for tech stocks is shifting from “highly elastic AI concepts” back to “certainty in AI beneficiaries.”

During the rapid expansion phase of the 2025 AI rally, large amounts of capital favored AI software, automation platforms, and generative applications, as these had higher valuation elasticity and stronger market sentiment. But as the AI industry gradually moves into a commercialization and realization phase, the focus is shifting back to companies that can sustain order intake and capital expenditure support.

This change is especially evident in the semiconductor sector.

Compared to some AI application companies still facing business model and profitability issues, TSMC represents a more foundational, industry-credible AI manufacturing capability. Regardless of how AI applications evolve in the future, demand for GPUs, ASICs, HBM, and advanced packaging will continue to grow.

This is why recent global capital has begun to reallocate more to leading semiconductor companies.

Meanwhile, the flow of funds into US ETFs has also shifted noticeably. Semiconductor ETFs like SOXX and SMH continue to attract market attention, while some high-valuation AI software stocks have started to show increased volatility. The change in risk appetite is driving the AI rally back toward the “hardware and infrastructure mainline.”

Why AI Software Stocks and AI Infrastructure Stocks Are Diverging

After entering the second phase of the AI rally, internal market differentiation has become apparent.

Previously, the AI market was mainly focused on the application layer, with AI agents, office software, and automation platforms attracting significant capital. But as the market moves into an earnings realization phase, the commercialization issues of AI software companies are being re-examined.

In contrast, the demand logic for AI infrastructure companies is clearer.

As AI model sizes continue to expand, demand for GPUs, HBM, advanced processes, and data centers has not weakened but further increased. Especially as AI competition among large tech firms intensifies, capital expenditure has not slowed but continued to rise.

Market is increasingly aware that the real bottleneck in AI is not the applications but the supply of computing power.

This means that the importance of advanced processes, CoWoS packaging, and high-performance computing resources remains on the rise. Compared to “future beneficiaries” among AI application companies, AI infrastructure firms are already in the stage of real orders and revenue realization.

The ongoing strength of TSMC largely reflects this shift in market structure.

Why Semiconductor Leaders Are Re-emerging as Global Safe Havens

In the current high-volatility environment, AI semiconductor leaders are gradually gaining “safe haven” attributes.

This logic reflects a high consensus among global capital on the long-term demand for AI. Compared to more volatile growth concept stocks, semiconductor giants like TSMC possess:

• Long-term AI growth fundamentals
• Central position in the global supply chain
• Extremely high industry entry barriers
• Stable cash flow and profitability

For large institutional investors, such assets are more conducive to long-term allocation.

Especially as macro uncertainties increase worldwide, market funds tend to flow out of high-volatility growth assets back into core industry leaders. Historically, “safe havens” included giants like Apple and Microsoft, but in the current AI cycle, semiconductor leaders are gradually assuming similar roles.

TSMC’s current revaluation is fundamentally a reflection of the increasing importance of global AI infrastructure.

Risks to Watch in a High-Valuation Market Environment

Although the AI semiconductor rally remains strong, discussions around valuation risks and capital expenditure cycles are heating up.

The biggest market concern remains whether AI capital expenditure can sustain high growth long-term. If major cloud providers slow GPU procurement or cut data center investments, the valuation logic of the entire AI infrastructure chain could be affected.

Additionally, valuations in the semiconductor sector have already risen significantly, implying that the market has priced in high growth expectations.

If future developments include:

• AI commercialization falling short of expectations
• Data center expansion slowing
• Global economic conditions worsening
• US Treasury yields rising further
• Geopolitical risks escalating

then overall tech stock volatility could further increase.

Advanced packaging and CoWoS capacity are also key market focuses.

With demand for Blackwell GPUs and AI ASICs continuing to grow, advanced packaging resources have become a core bottleneck in the AI supply chain. If supply chain expansion cannot keep pace with AI demand, long-term growth expectations for AI infrastructure may also fluctuate.

Therefore, while the market remains optimistic about the long-term trend of AI semiconductors, heightened risk sensitivity is emerging during this volatile phase.

Can AI Infrastructure Sustain the Rally in Tech Stocks?

The sustainability of the AI infrastructure rally depends mainly on whether the global capital expenditure cycle continues to expand.

Currently, competition among large tech firms remains fierce. Whether it’s model training, enterprise AI services, or inference deployment, ongoing increases in GPU, server, and data center investments are necessary. This provides strong short-term support for AI infrastructure demand.

However, the market may gradually shift from a “full AI bull market” to a “core asset concentration rally.”

In other words, not all AI concept stocks will continue to rise; those that truly control core industry resources will be more likely to attract sustained long-term capital.

The reason TSMC has re-emerged as a focal point is precisely because it is one of the most central links in the AI manufacturing chain.

In the coming years, the key variable in global tech stock competition may no longer be just AI concepts but who can truly meet the long-term demand generated by AI computing power expansion. Advanced processes, advanced packaging, and high-performance computing resources will continue to be the most critical underlying infrastructure in the AI cycle.

Summary

TSMC’s over 210% increase in the past year is not just a single-stock phenomenon but a microcosm of global capital reflow into AI infrastructure and core semiconductor assets.

Compared to the previous focus on AI application layers, current capital is refocusing on advanced processes, GPU supply chains, data centers, and high-performance computing—more fundamental AI infrastructure logic. The expansion of global tech capital expenditure also drives leading semiconductor companies to once again become the core of the AI mainline.

The future market competition will likely shift from “who has the AI concept” to “who can truly support AI computing power needs.” The advanced manufacturing capabilities represented by TSMC are becoming one of the most critical underlying infrastructures in the global AI cycle.

FAQ

Why did TSMC’s stock rise over 210% in the past year?

TSMC’s significant rise over the past year was mainly driven by expanding AI data center capital expenditure, increased demand for advanced processes, and the reflow of global institutional funds into AI semiconductors.

Why does AI capital expenditure influence TSMC’s stock price?

AI model training and data center expansion require大量 high-performance GPUs and advanced process chips, and TSMC is one of the world’s key suppliers of AI chips.

Why are funds shifting from AI software stocks back to AI infrastructure stocks?

AI infrastructure companies are now entering a stage of real orders and capital expenditure realization, with more predictable performance compared to some AI software firms.

What are the biggest current risks for TSMC?

Main risks include a slowdown in AI capital expenditure, valuation pressures, bottlenecks in advanced packaging supply, and changes in the global macro environment.

Is the semiconductor sector entering a new cycle?

With ongoing growth in AI computing demand, the market is reassessing the long-term growth prospects of semiconductors, and the AI infrastructure cycle may be driving a new industry upturn.