Taiwan overtakes India as AI rally reshapes global equity market rankings
Taiwan has overtaken India to become the world’s fifth-largest stock market, driven by a surge in AI-linked technology stocks, while South Korea’s market capitalization has jumped 70% this year due to semiconductor and AI rallies. India’s market value has declined 7% year-to-date, with foreign investors pulling over $20 billion amid weakness in equities and currency, as it lags in AI and semiconductor representation.
The global AI boom is reshaping equity market rankings, with Taiwan surpassing India to become the fifth-largest stock market. Taiwan’s market capitalization has surged 50% this year to nearly $5 trillion, while India’s has fallen 7% to $4.92 trillion, dropping to sixth place. South Korea, home to Samsung Electronics and SK Hynix, has seen its market value rise nearly 70% to $4.5 trillion, driven by semiconductor and AI-linked stock rallies. Investors are shifting billions toward Korean and Taiwanese stocks, betting on AI-driven growth, while India struggles with limited representation in the global semiconductor and AI supply chain. Foreign outflows from India exceed $20 billion this year, as investors prioritize markets with stronger AI exposure. Analysts note India’s lack of a pure AI play and high capital gains tax as key drawbacks. Taiwan Semiconductor Manufacturing Company (TSMC) has gained nearly 50% this year, while Samsung Electronics and SK Hynix have rallied 2.4 times and three times, respectively. AI companies are expected to spend nearly $1 trillion on capital expenditure over 2026 and 2027, fueling demand for data centers, semiconductors, and energy infrastructure. Experts warn of overcrowding in AI trades and market concentration risks, with Samsung and SK Hynix accounting for nearly half of South Korea’s market value and TSMC representing almost 40% of Taiwan’s. Despite these risks, investors remain focused on AI-linked gains, rotating capital away from India’s more diversified but slower-growing market. Reliance Industries, India’s most valuable company, makes up only about 4% of its total market capitalization. As long as AI momentum persists, markets like South Korea and Taiwan will likely retain investor preference, though corrections remain a potential risk. India’s appeal may remain limited until it strengthens its position in the AI and semiconductor sectors.
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