The Taiwan stock market is currently challenging the recovery of the half-year line, with currency fluctuations indicating potential long-term buying opportunities. As non-farm payroll data and the upcoming US-China London talks approach, US stocks have surged, with the S&P 500 breaking the 6000-point mark.

Looking ahead to Taiwan's third quarter, the shareholder's peak season continues to provide themes, and the Taiwan index has stabilized above the monthly line, set to challenge the recovery of the half-year line. Investment trust institutions point out that although currency fluctuations may impact corporate profits, the current surge in the currency market has exceeded half of that during Trump's previous term. If this wave impacts stock prices, it could develop into a promising long-term buying point. If the long-term valuation falls below the average, it is advisable to consider phased purchases.

PGIM's Xiaoyin Du emphasized that the strong performance of both domestic and international tech giants boosts positive momentum for Taiwan stocks. First, AI leader Nvidia reports impressive financial results, followed by positive news released during a shareholder meeting from a major wafer manufacturer this week, pushing technology stocks higher and driving up the index. The technical outlook for Taiwan stocks is also showing strength, having recovered the tariff gap, though trading volume has not significantly expanded.

Moreover, regarding the tariff issue, Du noted that it continues to disrupt the market. The intervention of the US judiciary not only increases analysis difficulty but may also prolong the impact of this variable. While current tariff rates are less extreme than previously, the 10% tariffs are still exerting downward pressure on the global economy.

In analyzing the US market, Du indicated that as the likelihood of US economic slowdown increases, corporate profit pressures will rise. Evidence of this can be seen in the cyclical revision of profit forecasts for US stocks. The S&P 500 components' profit forecast for 2025 was 10.4% in April, but it has dropped to 8.7% in May, and the technology sector's forecast has decreased from 17.9% to 16.6%.

Recent economic data from Taiwan has outperformed global averages. Du explained that this is primarily due to urgent demand and AI needs, which have strengthened economic performance. However, in the medium to long term, currency fluctuations may still impact corporate profits in Taiwan. The current surge in the currency market has exceeded half of what occurred during Trump’s previous term, influencing technology, finance, and traditional sectors. If reflected in stock prices, this presents a good long-term buying opportunity, recommending phased purchases when valuations fall below long-term averages.

As for stock selection and operational strategies, Du recommends that current stock selection in Taiwan should focus on themes rather than just market trends. Short-term rebounds are possible for deeply discounted thematic stocks, while holding onto long-term trend stocks is advisable. Focus should be on long-term buying points for the second half of the year, with technology stocks centered on cloud AI, semiconductor foundries for 2-nanometer supply chains, memory, edge computing, optical communication, low-Earth satellites, robotics, and foldable smartphones. For traditional sectors, the biotechnology sector can take precedence, while other industries should wait until tariff issues are resolved for further analysis.