According to Gate TradFi market data, TSM has surged from around $134 in April 2025 to approximately $420 by May 2026, marking a cumulative gain of over 210% in the past year. Amid heightened volatility in global tech stocks, TSM has emerged as one of the strongest core assets in the AI sector. Unlike previous market cycles that focused on the recovery of consumer electronics, the current core drivers behind capital flowing back into the semiconductor sector are the expansion of AI data centers, tight supply of advanced process nodes, and a new wave of capital expenditure from global cloud providers. For global investors, TSM is no longer just the world’s leading foundry in the traditional sense—it has become a critical infrastructure node in the AI computing ecosystem.
The biggest difference in this round of the AI rally compared to previous years is that capital has shifted from "AI concept diffusion" back to "AI infrastructure certainty." Unlike the uncertainties facing AI software, AI agents, and generative applications, demand for GPUs, advanced packaging, HBM, and data centers has now translated into real orders. The market is no longer just trading on future stories—global AI capital expenditure is in the midst of a genuine expansion.
TSM Weekly Chart Enters High-Volatility Uptrend
TSM’s weekly chart structure has clearly entered an accelerated uptrend.
From a technical perspective, after breaking out of its previous consolidation range, TSM’s weekly gains have expanded significantly, with volatility at higher levels also increasing. Market sentiment has shifted from "institutional allocation" to "trend reinforcement." With a cumulative gain of over 210% in the past year, TSM has become one of the strongest core assets in the global semiconductor sector.
This structure typically indicates that the capital driving the stock higher is no longer just short-term traders, but increasingly mid- and long-term institutional investors reinforcing the AI infrastructure narrative.
Whereas the initial phase of the 2024 AI rally was driven mainly by NVIDIA as the sole focus, capital is now repricing the entire AI supply chain, including advanced process nodes, advanced packaging, servers, power management, and data center infrastructure.
As a result, TSM’s significance at this stage has fundamentally changed.
Previously, the market viewed TSMC primarily as a key indicator of the global consumer electronics cycle. Now, TSM is increasingly 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 uptrend lies the market’s strengthening expectations for long-term AI demand.
Why Is the US AI Sector Back in the Spotlight?
The renewed focus on the AI sector is not just a result of improved sentiment—it reflects a global expansion in technology capital expenditure.
Recently, the US AI rally extended from hardware to AI software, agents, and automation platforms, with significant capital chasing new narratives at the application layer. However, as the market enters an earnings realization phase, investors are refocusing on infrastructure companies that can truly support the growing demand for AI computing power.
Compared to the uncertainties at the application layer, the business logic of AI infrastructure is more straightforward.
Whether it’s large language model training or enterprise AI inference deployment, both require higher-density data centers, more powerful GPUs, advanced packaging technologies, and continually expanding server infrastructure. This means that competition in the AI industry ultimately returns to chip manufacturing and computing power supply.
Recent capital expenditures by global cloud providers have further reinforced this trend.
Microsoft, Meta, Google, and Amazon have all ramped up investment in AI data centers over recent quarters, raising expectations for long-term expansion of AI infrastructure. The capital market’s focus has shifted beyond just NVIDIA GPU sales to whether the entire AI computing ecosystem is entering a prolonged growth cycle.
Against this backdrop, it’s increasingly logical for global capital to refocus on core AI infrastructure companies like TSM, Broadcom, and Delta Electronics.
How Is Institutional Risk Appetite Changing?
Global institutional investors are shifting their allocation logic for tech stocks from "high-beta AI concepts" back to "high-certainty AI beneficiaries."
During the rapid expansion phase of the AI rally in 2025, the market favored AI software, automation platforms, and generative applications for their higher valuation elasticity and stronger sentiment. But as the AI industry moves into a phase of commercial realization, investors are refocusing on companies that can secure steady orders and ongoing capital expenditure.
This shift is especially pronounced in the semiconductor sector.
While some AI application companies still face challenges with business models and profitability, TSM represents a more fundamental and industrially certain AI manufacturing capability. Regardless of how AI applications evolve, demand for GPUs, ASICs, HBM, and advanced packaging will continue to grow.
This is why global capital has recently increased allocations to leading semiconductor stocks.
At the same time, US ETF flows have also shifted. Semiconductor ETFs such as SOXX and SMH are attracting sustained attention, while some high-valuation AI software stocks are experiencing increased volatility. This change in risk appetite is driving the AI rally back toward the "hardware and infrastructure main line."
Why Are AI Software and AI Infrastructure Stocks Diverging?
As the AI rally enters its second phase, clear differentiation has emerged within the market.
Previously, the AI market was driven largely by the application layer, with AI agents, productivity software, and automation platforms all attracting significant capital. But as the market moves into an earnings realization phase, the commercialization challenges facing AI software companies are coming under renewed scrutiny.
In contrast, the demand logic for AI infrastructure companies is much clearer.
As AI model sizes continue to expand, demand for GPUs, HBM, advanced process nodes, and data centers has not diminished—in fact, it continues to grow. Especially as competition among major tech firms intensifies, capital expenditures are not slowing down, but increasing.
The market is also recognizing that the real bottleneck in the AI industry lies not in applications, but in computing power supply.
This means that the importance of advanced process nodes, CoWoS packaging, and high-performance computing resources continues to rise. Compared to AI application companies that "might benefit in the future," AI infrastructure firms are already seeing real orders and revenue.
TSM’s continued strength is a direct reflection of this structural shift in the market.
Why Are Leading Semiconductor Stocks Becoming a Safe Haven for Global Capital?
In today’s highly volatile market environment, leading AI semiconductor stocks are increasingly taking on "safe haven" characteristics.
This logic reflects a broad consensus among global investors on the long-term demand for AI. Compared to more volatile growth stocks, leading semiconductor companies like TSM offer:
- Long-term AI growth prospects
- Core positions in the global supply chain
- Extremely high industry entry barriers
- Stable cash flow and profitability
For large institutions, these assets are easier to hold as long-term allocations.
Especially as global macro uncertainty rises, capital often rotates from high-volatility growth assets back into industry leaders. In the past, "safe haven" stocks were typically mega-cap names like Apple and Microsoft. In the current AI cycle, leading semiconductor stocks are increasingly playing a similar role.
TSM’s recent re-rating is essentially a result of the rising importance of global AI infrastructure.
What Risks Is the Market Watching in a High-Valuation Environment?
Although the AI semiconductor rally remains strong, concerns about high valuations and the capital expenditure cycle are mounting.
The biggest debate in the market is whether AI capital expenditure can sustain high growth in the future. If major cloud providers slow GPU purchases or cut data center investments, the entire AI infrastructure value chain could see its valuation logic challenged.
Additionally, semiconductor sector valuations have already risen significantly, meaning that high expectations for future growth are already priced in.
If, going forward:
- AI commercialization falls short of expectations
- Data center expansion slows
- The global economic environment deteriorates
- US Treasury yields continue to rise
- Geopolitical risks escalate
all could lead to increased volatility in tech stocks.
Advanced packaging and CoWoS capacity are also key areas of market focus.
With demand for Blackwell GPUs and AI ASICs continuing to rise, advanced packaging resources have become a core bottleneck in the AI supply chain. If supply chain expansion cannot keep pace with AI demand growth, expectations for long-term growth in AI infrastructure could waver.
Thus, while the outlook for AI semiconductors remains positive, investors are becoming more sensitive to risk control in this high-volatility phase.
Can the AI Infrastructure Rally Continue to Drive Tech Stocks Higher?
Whether the AI infrastructure rally can be sustained ultimately depends on whether the global capital expenditure cycle continues to expand.
At present, competition among major tech companies in AI remains fierce. Whether for model training, enterprise AI services, or inference deployment, ongoing investment in GPUs, servers, and data center resources is essential. This suggests that, in the short term, demand for AI infrastructure remains well supported.
However, the market may soon shift from a "broad AI bull market" to a "concentration in core assets."
In other words, not all AI concept stocks will continue to rise; companies that truly control core resources in the supply chain are more likely to attract sustained long-term capital.
TSM’s renewed focus by global investors is precisely because it occupies one of the most critical positions in the AI manufacturing chain.
In the coming years, the key variable in global tech stock competition may no longer be just the AI concept itself, but who can truly meet the long-term demand created by expanding AI computing power. Advanced process nodes, advanced packaging, and high-performance computing resources will remain the most essential infrastructure in the AI cycle.
Summary
TSM’s more than 210% gain over the past year is not just a story about a single stock—it reflects the broader return of global capital to AI infrastructure and core semiconductor assets.
Whereas the market previously focused on trading the AI application layer, capital is now refocusing on the deeper logic of advanced process nodes, GPU supply chains, data centers, and high-performance computing. The expansion of global tech capital expenditure has also propelled leading semiconductor stocks to the core of the AI narrative.
Looking ahead, the key to market competition may shift from "who has the AI concept" to "who can truly meet the demand for AI computing power." The advanced manufacturing capabilities represented by TSM are becoming one of the most critical foundational infrastructures in the global AI cycle.
FAQ
Why did TSM gain over 210% in the past year?
TSM’s surge over the past year has been driven by the expansion of AI data center capital expenditures, increased demand for advanced process nodes, and renewed inflows from global institutional investors into the AI semiconductor sector.
Why does AI capital expenditure impact TSM’s stock price?
Training AI models and expanding data centers require large volumes of high-performance GPUs and advanced process chips, and TSM is one of the world’s core suppliers of AI chip manufacturing.
Why is capital shifting from AI software stocks back to AI infrastructure stocks?
AI infrastructure companies have entered a phase of real orders and capital expenditure realization, offering stronger earnings certainty compared to some AI software firms.
What is TSM’s biggest market risk right now?
TSM’s 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?
As demand for AI computing power continues to grow, the market is reassessing the long-term growth potential of the semiconductor industry. The AI infrastructure cycle may be driving a new upturn in the sector.
