Earnings due Thursday from the key Nvidia Corp. supplier will help global traders gauge whether the rebound in AI infrastructure stocks is merited.
A surge of retail investor buying has helped drive shares of Taiwan Semiconductor Manufacturing Co. to a record high as the artificial intelligence trade roars back to life.
The world's top chipmaker has climbed to fresh peaks this week, erasing its loss since the start of the Iran war. Earnings due Thursday from the key Nvidia Corp. supplier will help global traders gauge whether the rebound in AI infrastructure stocks is merited.
While institutions still dominate shareholdings in TSMC, individual investors are gaining more influence as their numbers swell. The stock's "odd-lot" holders -- generally equated with retail -- have jumped about 30% since the end of February to a record of over 2 million.
"What we are seeing in retail participation is not a cyclical spike, but a structural shift in access and narrative penetration," said Dilin Wu, a strategist at Pepperstone Group Limited. "TSMC has effectively crossed a threshold: it is no longer just a semiconductor proxy owned by institutions, but a 'default entry point' for retail exposure to the AI cycle."
The growing importance of retail investing has been a theme across global markets in recent years. Yet few companies command as much magnetism among individual investors in their home countries as does TSMC, whose dominance in advanced chipmaking has made it both a national symbol and stock market linchpin.
TSMC's weighting -- at 45% of the benchmark Taiex -- has created headaches for active funds with single-stock allocation caps at 10%, but helped boost the influence of retail traders.
A more favorable regulatory environment is also having an impact. The rollout of regular investing plans enabling automatic, scheduled purchases of stocks and ETFs has encouraged greater participation from households.
The Iran war accelerated the trend, with moms and pops piling into TSMC as foreign funds reduced positions to de-risk. The percentage of odd-lot trading in TSMC's total turnover climbed in March, with one session reaching nearly 20%, Bloomberg compiled data shows.
"Retail activity often picks up as volatility rises, especially as investors use any weakness as an opportunity to buy the dip," said Matt Toms, head of cash equity execution for Asia-Pacific at Barclays Plc.
Part of the spike was likely driven by arbitrage trades that aim to take advantage of temporary price differences between odd-lots and board-lots, according to Tareck Horchani, head of sales trading prime brokerage at Maybank Securities Pte.
Still, there are more than 206,000 retail accounts making regular investment in TSMC shares as of the end of March, up more than 20% from February, according to stock exchange data.
ETFs have been another key source of retail cash. Taiwan's largest, the Yuanta/P-shares Taiwan Top 50 ETF, notched record inflows in March. The fund has a more than 60% weighting in TSMC and has nearly one million investor accounts making regular purchase.
"Unlike past episodes such as the 2008 financial crisis or the 2022 downturn, a shift over the past year is that retail investors would buy on weakness but don't necessarily sell on rebounds," said Julian Liu, chairman of Yuanta Securities Investment Trust Co. This helps provide a "cushion impact" for TSMC shares," he added.
A recent return of appetite for tech hardware stocks has also provided a lift. Upcoming detailed results from TSMC could bring a further tailwind after the company last week reported a 35% increase in revenue for the three months through March.
The number of odd-lot TSMC traders now equals nearly 9% of Taiwan's population. Among them is A-Ru, a 32‑year‑old trader who has drawn 12,500 followers on Threads after vowing to buy one share of the chipmaker every day until he finds a girlfriend.
While his portfolio now shows an estimated return of 75%, he said he has no plans to cash in anytime soon. His reasoning is twofold: TSMC remains a highly competitive company, and he still hasn’t found a girlfriend.
“As long as TSMC’s share price stays within a reasonable range and its outlook remains intact, I’ll keep buying,” he said.