# Asia’s AI Stock Frenzy Is a Warning Sign for Global Markets

An episode of [Big Take](https://invisiblenetwork.ai/podcast/1578096201), 30 Jun 2026, 17 min.

Audio: https://podtrac.com/pts/redirect.mp3/tracking.swap.fm/track/UVBrz8bN8aM2Xe47PEPu/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/825d4e29-b616-46f4-afd7-ae2b0013005c/d8d6aa16-6dd9-4494-8eb8-b4790157a9cf/audio.mp3?utm_source=Podcast&in_playlist=8b1dd624-a026-43e9-8b57-ae2b00130066

Thanks to the AI boom, stock markets in Taiwan and South Korea have seen historic rallies this year. But as retail investors pile in, often using borrowed money, concerns are growing over whether this momentum is sustainable. On today’s Big Take Asia podcast, guest host Rebecca Choong Wilkins speaks with Bloomberg’s Asian markets reporter Charlotte Yang and Bloomberg Opinion’s Shuli Ren about the risks of betting on AI and how potential fallout could ripple beyond the region. Read more: Taiwanese Go Deep Into Debt to Amp 100% Stock Rally Play Micron, Hynix and Samsung ETFs at Your Peril Hosted by Rebecca Choong Wilkins; Produced by Naomi Ng; Reported by Charlotte Yang, Shuli Ren, Chien-Hua Wan; Edited by Paddy Hirsch, Jiyeun Lee, Julia Weaver. Fact-checking by Victor Swezey; Engineering by Taka Yasuzawa. Senior Producer: Naomi Shavin; Deputy Executive Producer: Julia Weaver. Executive Producer: Nicole Beemsterboer. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
[0:08] Speaker 2: Stock markets in South Korea and Taiwan have been on
[0:11] Speaker 2: a wild ride lately, record highs, sharp drops, and dramatic
[0:17] Speaker 2: swings in between.
[0:18] Speaker 1: Taiwan overtakes. India is the fifth largest stock market in
[0:22] Speaker 1: the world.
[0:22] Speaker 2: For cost me about a month ago, was down eight
[0:24] Speaker 2: percent two days in a row, and then up eight
[0:26] Speaker 2: percent on the third day and then rally to new hearts.
[0:29] Speaker 2: It's actually been a rollercoaster week for the cosby and
[0:31] Speaker 2: South Korea nowdown, There's been plenty of volatility, but if
[0:36] Speaker 2: you zoom out, the bigger picture tells another story.
[0:39] Speaker 3: Korea's CASPITINGDAX has nearly tripled over the passire and Taiwan's
[0:45] Speaker 3: Tayas has more than doubled. That kind of gangs makes
[0:48] Speaker 3: the US market looks like it's a standstill.
[0:51] Speaker 2: Charlotte Yang covers Asian markets for Bloomberg. She says the
[0:54] Speaker 2: rally comes down to one thing. AI tech giants like Amazon, Google,
[1:01] Speaker 2: Meta and Microsoft are spending hundreds of billions a year
[1:04] Speaker 2: building out AI infrastructure, and all of that runs on
[1:08] Speaker 2: advanced chips and semiconductors, many of them made in Korea and.
[1:12] Speaker 3: Taiwan, we're talking about companies like Taiwan's TSMC that's the
[1:18] Speaker 3: world's largest chief foundry. And in Korea, the edges laser
[1:23] Speaker 3: focused on memory chips Eskhinex and Sensund that really dominate
[1:27] Speaker 3: this segment.
[1:28] Speaker 2: The explosive demand for these chips has helped turn these
[1:32] Speaker 2: firms into some of the most profitable in the world.
[1:35] Speaker 2: And as these Asian chip maker stocks kept climbing, retail
[1:40] Speaker 2: investors piled in, hoping to cash in on the rally.
[1:44] Speaker 3: The thing that versus a Weinsinger generation rally and property
[1:49] Speaker 3: so expensive my salary is now keeping up inflation. Going
[1:53] Speaker 3: into the stock market is my best way to make
[1:55] Speaker 3: quick money.
[1:57] Speaker 2: Retail investors in both markets have always been out, but
[2:00] Speaker 2: this time their behavior looks different. In Taiwan, many are
[2:05] Speaker 2: borrowing heavily to buy more stocks. In Korea, some are
[2:08] Speaker 2: turning to risky structured products to boost returns. Bloomberg Opinion
[2:13] Speaker 2: columnist Shuly Wren says it's this rapid buildup of leverage
[2:18] Speaker 2: that's now raising alarm bells.
[2:21] Speaker 1: Until you sell your holdings. These are just paper games
[2:24] Speaker 1: that can evaporate overnight if the market suddenly turns You
[2:28] Speaker 1: end up within nothing, and possibly the capital came with
[2:31] Speaker 1: a lot of leverage. The kind of wealth destruction that
[2:34] Speaker 1: we could see it could be tremendous.
[2:36] Speaker 2: Right, and those risks may not stop with individual investors.
[2:41] Speaker 2: As markets grow more volatile and retail investors dive in deeper,
[2:45] Speaker 2: Charlotte says, the consequences could spread further.
[2:49] Speaker 3: I think today the markets are far more interconnected than before,
[2:53] Speaker 3: and just looking at the sharp downturns. The other day,
[2:56] Speaker 3: we saw with COSP COSP experience a teen percent drop
[3:01] Speaker 3: and it's quickly filtered into NIK, into Chinese marketing, ultimately
[3:05] Speaker 3: into the US overnight session. So I think that Earth's trades,
[3:09] Speaker 3: how a sharking career, or anywhere in Asia's tax sector
[3:12] Speaker 3: can quickly report through and affect in US markets in
[3:16] Speaker 3: the way people didn't anticipate before.
[3:23] Speaker 2: This is the Big Take Asia from Bloomberg News. I'm
[3:26] Speaker 2: Rebecca Cheung Wilkins in for one half every week we
[3:31] Speaker 2: take you inside some of the world's biggest and most
[3:34] Speaker 2: powerful economies and the market's tycoons and businesses that drive
[3:38] Speaker 2: this ever shifting region. Today on the show, how individual
[3:43] Speaker 2: investors in Taiwan and Korea are rolling the dice to
[3:46] Speaker 2: try and cash in on the AI rally, What are
[3:49] Speaker 2: the consequences for them and their economies, and if things
[3:53] Speaker 2: go wrong, how far could the fallout spread. To see
[4:04] Speaker 2: just how widespread Taiwan's investing frenzy has become, Bloomberg went
[4:08] Speaker 2: to a small staff I joined in Taipei, the island's
[4:11] Speaker 2: capital city. The restaurants called Pinci and Riachao, and lately
[4:16] Speaker 2: it's become famous for something other than the food. Nvidia
[4:20] Speaker 2: CEO Jensen Huang was recently spotted having dinner there.
[4:23] Speaker 3: They had a round tables with plastic stooes. As loud
[4:27] Speaker 3: and a bit messy, but it's cheap and always you
[4:29] Speaker 3: can expect good food.
[4:31] Speaker 2: Since then, it's become a meeting place for Taiwanese people
[4:34] Speaker 2: who are interested in investing in the stock market.
[4:37] Speaker 3: So it was a Monday evening in the stock market
[4:40] Speaker 3: that day, actually saying earlier, so the benchmark index was
[4:44] Speaker 3: down fare pot five percent, but the mood there in
[4:48] Speaker 3: the conversations people were having about the stocks were just
[4:51] Speaker 3: still very upbeat. In one corner there was excited chatted
[4:54] Speaker 3: about AI in the market and whether they should be
[4:57] Speaker 3: taking advantage of the day's decline and buy more stocks
[5:00] Speaker 3: on the chief. And in another corner, you have a
[5:03] Speaker 3: middle age man. You can hear him lecturing on his
[5:06] Speaker 3: friends about the England and outs of these pee ratios
[5:09] Speaker 3: and how to use them to pick winners.
[5:13] Speaker 2: Bloomberg. Charlotte Yang has spent weeks speaking to retail investors
[5:18] Speaker 2: in Taiwan, and she says stock trading has become a
[5:21] Speaker 2: regular part of daily life there.
[5:24] Speaker 3: The common phrase that come up in my conversation with
[5:26] Speaker 3: them is that they say this has almost become like
[5:29] Speaker 3: a national pastime or national movement.
[5:32] Speaker 2: Charlotte says that's a real shift. Until recently, investing in
[5:36] Speaker 2: the stock market was largely seen as something for finance professionals,
[5:40] Speaker 2: but close to half a million people have opened accounts
[5:43] Speaker 2: to trade in the Taiwan stock market in the first
[5:46] Speaker 2: half of this year. Many are investing for the first time,
[5:49] Speaker 2: attracted by the prospect of getting rich quick.
[5:53] Speaker 3: If you buy thousand shares of TSMC over the past year,
[5:56] Speaker 3: you just buy it and then you put it there,
[6:00] Speaker 3: making forty one thousand dollars to put into contacts. That
[6:04] Speaker 3: is more than double the median annual salary in Taiwan
[6:07] Speaker 3: and It's also more than the annual salary of many
[6:09] Speaker 3: hardworking white color office jobs. Their big argument is that
[6:14] Speaker 3: this rally is really backed by the fundamentals and staurt
[6:17] Speaker 3: earning delivery. So unlike the dot com euro which is
[6:21] Speaker 3: dominated by companies with minimum revenues for like some unproven
[6:25] Speaker 3: business models, this time the leaders of this ai rally,
[6:29] Speaker 3: like TSMC s k Heinik Simsung, the highly profitable was
[6:33] Speaker 3: real technology edge and also strong client demand that via
[6:37] Speaker 3: supply capacities simply just cannot meet up with in solar.
[6:40] Speaker 3: As that continues and the evaluation is not expensive, the
[6:44] Speaker 3: rally has more to go.
[6:46] Speaker 2: That belief has helped her stock investing to a fever
[6:50] Speaker 2: pitch in Taiwan. For some investors, putting in just their
[6:54] Speaker 2: savings isn't enough. They're borrowing money to buy even more stocks.
[6:59] Speaker 3: Where's the frenzy in full swing? People are really putting
[7:02] Speaker 3: whatever idle cash they have into those stocks. And also
[7:04] Speaker 3: they're boring from bookers in margin loans and also in
[7:09] Speaker 3: unrestricted loans. Whether that means is people would pledge their
[7:12] Speaker 3: stockholdings and ETF holdings to get more cash. They also
[7:16] Speaker 3: turned to the borrowing from banks like in personal credit
[7:19] Speaker 3: or in other type of loans.
[7:23] Speaker 2: For many investors, borrowing to invest looks like a smart
[7:26] Speaker 2: bet interest rates in Taiwan alone, and if stocks like
[7:30] Speaker 2: TSMC keep delivering huge returns, investors figure they can easily
[7:34] Speaker 2: cover the cost of a loan and still come out ahead.
[7:37] Speaker 3: So if you get bank loans, you analyzed interest rates
[7:40] Speaker 3: about two to three percent, and if you do a
[7:43] Speaker 3: lot of calculation, like I put my money into TSMC
[7:46] Speaker 3: or like the mainstream popular ATFS, I will be generating
[7:50] Speaker 3: two percent returning year today.
[7:52] Speaker 2: Over the past twelve months, margin loans, or money investors
[7:56] Speaker 2: borrow from brokerages to buy stocks, have searched one hundreds
[8:00] Speaker 2: sixty percent. Last week, margin loans hidden all time high,
[8:04] Speaker 2: overtaking the previous record set just before the dot com
[8:08] Speaker 2: bubble burst in two thousand. Meanwhile, loans backed by stocks
[8:13] Speaker 2: and ETFs where investors pledge their portfolios as collateral, hit
[8:18] Speaker 2: a record high in April. That's what worries some market watches,
[8:24] Speaker 2: not just that stocks have risen so fast, but that
[8:27] Speaker 2: more of the rally is being built on borrowed money
[8:31] Speaker 2: and too much optimism.
[8:33] Speaker 3: The biggest worried people have right now as what if
[8:36] Speaker 3: you see a quick shift in global AI sentiment, And
[8:41] Speaker 3: because Taiwan's market and the economy are so tied to AI,
[8:47] Speaker 3: so tied to the tag industry, we have eighty percent
[8:50] Speaker 3: of the benchmarked hied to tech and twenty percent of
[8:52] Speaker 3: GDP is from the tech industry. So any of their shift,
[8:56] Speaker 3: combined with a rapad built up in leverages, you could
[8:59] Speaker 3: easily see ugly selling.
[9:01] Speaker 2: So what happens if people suddenly lose confidence in AI?
[9:06] Speaker 2: How bad could it get and how far could the
[9:09] Speaker 2: damage spread? That plus the hidden dangers behind one of
[9:13] Speaker 2: the most popular and riskiest trades on Korean stocks. That's
[9:17] Speaker 2: after the break. As AI stocks keep climbing, financial firms
[9:32] Speaker 2: are rolling out new ways for investors ti bet on
[9:34] Speaker 2: the career Taiwan rally. Before we get into the nuts
[9:38] Speaker 2: and bolts of this, you first need to understand one
[9:40] Speaker 2: of the fastest growing products they've promoted, leveraged single stock ETFs.
[9:46] Speaker 2: Now most ETFs or exchange traded funds, are pulled investment vehicles.
[9:51] Speaker 2: Like mutual funds, they hold baskets of securities like stocks, bonds,
[9:55] Speaker 2: or commodities, but unlike mutual funds, they trade on major
[9:59] Speaker 2: stock exchanges just like an individual stock. Leveraged single stock ETFs, however,
[10:06] Speaker 2: are different. For one thing, they track just one stock
[10:09] Speaker 2: instead of a basket. For another, they use derivatives to
[10:12] Speaker 2: magnify returns, and that can make them much riskier. His
[10:18] Speaker 2: Bloomberg Opinion columnist Shuly Wren.
[10:21] Speaker 1: Leverage, the single star ETFs amplify exposure to some stock
[10:26] Speaker 1: that the investor is very boolish, aren't, you can say,
[10:29] Speaker 1: by two x leveraged ETFs. So with this kind of ETFs,
[10:35] Speaker 1: you don't need to maintain a margin account. You don't
[10:37] Speaker 1: have to understand options, which can be quite complicated, and
[10:41] Speaker 1: the they trade kind.
[10:42] Speaker 3: Of like stocks.
[10:43] Speaker 2: That's why it's very popular, super popular in Korea, where
[10:47] Speaker 2: more than a dozen of these new leveraged ETFs debuted
[10:50] Speaker 2: in May, and where most of the buyers more than
[10:53] Speaker 2: ninety percent, aren't pension funds or insurance companies. They're retail
[10:57] Speaker 2: investors who have pumped nine billion dollars into these products.
[11:02] Speaker 2: They buy them because the returns can be staggering. Take
[11:06] Speaker 2: for example, Hong Kong listed single stock leverage ETF tied
[11:11] Speaker 2: to ESK Heinex, the Korean memory chip maker. It's designed
[11:15] Speaker 2: to deliver twice the stock's daily return.
[11:18] Speaker 1: If you were investor who'll bonding to this ETF at
[11:21] Speaker 1: the beginning of year, you're up seven hundred and ninety percent.
[11:24] Speaker 1: That's because Heynex has been doing very well throughout the year.
[11:28] Speaker 2: But the math behind these products gets complicated fast. Shirley
[11:33] Speaker 2: says these products are built for short term trading, sometimes
[11:37] Speaker 2: just over a single day, not long term investing. Most
[11:42] Speaker 2: retail investors buy and hold for a period of time.
[11:45] Speaker 2: Great if a company stock keeps going up, but if
[11:49] Speaker 2: it falls or cycles up and down, things can get messy.
[11:54] Speaker 1: When markets gatch hoppy. Even if the underlying stock is
[11:58] Speaker 1: ending up breaking even this kind of two x ETFs,
[12:02] Speaker 1: you'll still be losing money. So if you're bud into
[12:06] Speaker 1: this ETF at the beginning of June, when the stock
[12:10] Speaker 1: starts to become very volatile and it starts to whipsaw,
[12:13] Speaker 1: you are actually better off buying the underlying stock.
[12:17] Speaker 2: Do you think there are risks that retail investors are
[12:20] Speaker 2: not getting that the institutional investors are seeing.
[12:24] Speaker 1: Well, the biggest risk is valuation. I mean, I'm sorry
[12:27] Speaker 1: to say this, but the Samsund and Highex are starting
[12:31] Speaker 1: to trade like mean stocks and their trillion dollar companies investors,
[12:35] Speaker 1: they're not really considering valuation. In fact, imagination matters a
[12:40] Speaker 1: lot more than valuation, and that's quite dangerous because if
[12:44] Speaker 1: the market certainly turns, some retail investors will be getting
[12:48] Speaker 1: margin cores, and that's quite dangerous.
[12:50] Speaker 2: Investors who borrowed money to buy stocks get margin calls
[12:54] Speaker 2: from their brokerages. When the value of the stocks fall
[12:57] Speaker 2: below a certain level, investor, they are asked to put
[13:00] Speaker 2: in more money to make up for the losses. For
[13:03] Speaker 2: most people, the easiest way is to sell the stock,
[13:07] Speaker 2: and this kind of forced selling propels prices into a
[13:10] Speaker 2: downward spiral. Sly says. What worries that even more is
[13:14] Speaker 2: the all in mentality taking hold among some investors.
[13:19] Speaker 1: I heard from a teenager from Taiwan. She was saying
[13:22] Speaker 1: that the saying is sell your house, sell your cars,
[13:25] Speaker 1: and buy TSMC. That's the problem. Until you sell your holdings.
[13:30] Speaker 1: These are just paper games that can evaporate overnight. So
[13:34] Speaker 1: the risk is that you think you are making one
[13:37] Speaker 1: hundred percent returns this year on paper. If that return
[13:40] Speaker 1: reverses suddenly, you end up win nothing. It could possibly
[13:45] Speaker 1: traumatize a new generation of investors. What we saw after
[13:51] Speaker 1: Japan's economy's bubble burst was that Japanese people have turned
[13:55] Speaker 1: very cautious, right like, if you get burned very early
[13:59] Speaker 1: on in your twenties or thirties, that could really change
[14:03] Speaker 1: your risk appetite and the risk attitude for decades to come.
[14:07] Speaker 2: That's the risk for the investor. The risk for the
[14:10] Speaker 2: company is that these ETFs have become so popular with
[14:13] Speaker 2: speculators that they can drive a stock artificially high. And
[14:17] Speaker 2: then there's the risk to the market itself. There's now
[14:20] Speaker 2: a concern that these kinds of risky bets are becoming
[14:23] Speaker 2: large enough to influence trading in some markets. In Korea,
[14:27] Speaker 2: retail investor demand for certain stocks has created volatility so
[14:31] Speaker 2: extreme that the country's securities exchange had to temporarily suspend
[14:35] Speaker 2: trading five times this year to cub losses.
[14:39] Speaker 1: The retail investor participation is a global trend. It's not
[14:43] Speaker 1: just in self Career and Taiwan or US, right, Hong Kong, China.
[14:47] Speaker 1: I mean in China, everyone is a retail trader, and
[14:52] Speaker 1: I think that's a trend that's worth watching.
[14:55] Speaker 2: The retail buying frenzy is already affecting the Korean and
[14:58] Speaker 2: Taiwanese stock market in another, potentially more serious way. These
[15:03] Speaker 2: investors are buying at the same time that foreign and
[15:06] Speaker 2: institutional investors are selling. Since the beginning of this year,
[15:11] Speaker 2: foreign investors sold more than ninety billion dollars in Korean
[15:14] Speaker 2: stocks and twenty billion dollars worth of Taiwanese stocks.
[15:18] Speaker 1: Institutional investors they just feel like they're being overexposed to
[15:23] Speaker 1: South Korea and Taiwan. They have been selling this year.
[15:26] Speaker 1: So retail investors, on the other hand, have been buying.
[15:30] Speaker 1: Whenever foreigners are selling, they are actually the ones that
[15:33] Speaker 1: are pushing Taiwan and the South Korea's markets to new
[15:37] Speaker 1: record highs. If there is a real and wind, we
[15:41] Speaker 1: can see stocks down by twenty thirty percent overnight, and
[15:46] Speaker 1: that can create a lot of shock to the financial system.
[15:51] Speaker 1: Because Taiwan and the South Korea have so many semiconductor companies,
[15:56] Speaker 1: If there are crashes in these markets, the it is
[16:00] Speaker 1: not going to do so well because they all have
[16:03] Speaker 1: to benchmark against each other. If say High Next tumbles
[16:07] Speaker 1: twenty percent that day, you will see the US market
[16:11] Speaker 1: not opening so well, and we have already seen that.
[16:15] Speaker 2: Still Shutey says she doesn't think the AI boom is
[16:19] Speaker 2: about online just yet.
[16:21] Speaker 1: We're unlikely to see a bubble burst this year. What
[16:25] Speaker 1: we are seeing is that the supply demand dynamics is
[16:29] Speaker 1: very tight until all the way until twenty twenty seven. Basically,
[16:33] Speaker 1: each cycle last maybe three to four years. Right right now,
[16:36] Speaker 1: we're already a year two. Whenever the markets detect that
[16:41] Speaker 1: the demand may have peaked and that the supply demand
[16:45] Speaker 1: mechanics is turning against the suppliers, then the valuation will
[16:50] Speaker 1: have to fall, just because they are cyclical industries.
[16:54] Speaker 2: What comes up mus come down, yes, absolutely.
[16:57] Speaker 1: Because the supply demand dynamics change very quickly.
[17:03] Speaker 2: This is The Big Take Asia from Bloomberg News. I'm
[17:06] Speaker 2: Rebecca Chung Wilkins. To get more from The Big Take
[17:09] Speaker 2: and unlimited access to all of Bloomberg dot Com, subscribe
[17:13] Speaker 2: today at Bloomberg dot com slash podcast Offer. If you
[17:17] Speaker 2: like the episode, make sure to subscribe and review The
[17:19] Speaker 2: Big Take Asia wherever you listen to podcasts. It helps
[17:22] Speaker 2: people find the show. Thank you for listening. See you
[17:25] Speaker 2: next time.

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