Standard Chartered Maintains Bullish Stance on Taiwan Equities Amid AI Earnings Momentum; Gold Target Set at $5,000

Standard Chartered has unveiled its Q4 2026 global market outlook, contending that while market volatility is on the rise, corporate earnings will ultimately steer market direction. The bank highlighted Taiwan’s pivotal role in the global AI supply chain as a catalyst for superior earnings visibility, retaining its rating of the island as the most attractive investment destination in Asia. Concurrently, the bank reaffirmed a bullish outlook on gold, setting a 12-month price target of $5,000 per ounce (approximately NT$160,000).

Liu Chia-hao, Head of Wealth Management Investment Strategy at Standard Chartered, noted that financial markets in Q4 will face multiple variables, including rising oil prices, major central bank policy decisions, and the U.S. midterm elections, all of which could elevate short-term volatility. However, supported by corporate earnings growth, Standard Chartered maintains a relatively favorable view on U.S. and Asian (ex-Japan) equities. He analyzed that the AI investment theme is extending from semiconductors into the real economy; as computing demand accelerates rapidly, industries related to power supply, grid upgrades, and electrification are all demonstrating significant growth potential.

Standard Chartered’s Chief Investment Office pointed out that AI investment and corporate capital expenditure continue to drive the global economy, with a soft landing still viewed as the base-case scenario. However, if oil prices remain persistently elevated, this could push up inflation and increase market concerns regarding the economic outlook. The U.S. Federal Reserve, European Central Bank, and Bank of Japan may still tighten monetary policy further, while policy uncertainty stemming from the U.S. midterm elections could also affect market sentiment and capital flows.

Equities Over Bonds: Focus on Income and Duration Management

In terms of asset allocation, Standard Chartered continues to prefer equities over bonds, with U.S. and Asian (ex-Japan) markets offering the greatest investment appeal. On U.S. equity sector allocation, the bank remains bullish on technology and communication services sectors; active financial market activity and robust corporate capital expenditure also support fundamentals in the financials and materials sectors.

On the fixed income side, Standard Chartered is relatively favorable toward emerging market U.S. dollar government bonds, while maintaining a cautious view on developed market government bonds due to higher yield volatility risk. Given that major central banks are maintaining a tightening bias, longer-duration bonds remain susceptible to interest rate fluctuations, and the bank prefers allocations in the 3-to-7-year maturity range to balance income opportunities with interest rate risk. In corporate credit, both investment grade and high yield bonds can offer relatively stable sources of income.

Standard Chartered’s probability assessment for Q4 macroeconomic scenarios is as follows:

Note: Source is Standard Chartered Q4 2026 Global Market Outlook.

Dollar Strong Near-Term, Weaker Longer-Term; Oil Target Raised to $100

On foreign exchange, Standard Chartered believes that if the Federal Reserve tightens monetary policy further, this could support the dollar in the near term, with a current 3-month US Dollar Index forecast of 100.2. However, as the impact of oil prices and tariffs gradually fades, inflationary pressures ease, and the European Central Bank and Bank of Japan tighten policy further, the US Dollar Index is expected to gradually decline to 98 over the next 12 months. On the Japanese yen, if the Bank of Japan continues monetary policy normalization and the U.S.-Japan interest rate differential gradually narrows, this could provide support for the yen’s medium-term trajectory.

On crude oil, affected by geopolitical and supply disruption risks, Standard Chartered raised its 3-month West Texas Intermediate price forecast to $100 per barrel (approximately NT$3,200), and simultaneously raised its 12-month target to $80 per barrel (approximately NT$2,500). Short-term supply uncertainty may keep oil prices elevated, but current prices have not yet reached levels typical of historical energy shocks. If nominal oil prices rise to the $120–$150 per barrel range, the impact on global growth and inflation could increase significantly.

On gold, Standard Chartered maintains its bullish view, keeping its 3-month and 12-month targets at $4,750 and $5,000 per ounce, respectively. With the dollar potentially weakening over the medium term and emerging market central banks continuing to increase gold reserves, these factors are expected to provide support for gold prices.

Taiwan Earnings to Challenge NT$10 Trillion Next Year; Market Cap Seen at NT$200 Trillion

Cathay United Bank Chief Economist Lin Chi-chao offered an even more optimistic earnings forecast from a Taiwanese perspective. He noted that, benefiting from the explosive AI capital expenditure of global giants, Taiwanese corporate earnings momentum is strong, with listed company after-tax net profit likely to break through the NT$10 trillion (approximately $313.8 billion) mark next year (2027), and total market capitalization challenging NT$200 trillion (approximately $6.3 trillion), laying a solid fundamental foundation for the long-term development of the Taiwan stock market.

Lin Chi-chao analyzed that AI capital expenditure from the world’s top five cloud service providers is showing explosive growth, with year-over-year increases of 72.1% in 2024, 95.6% in 2025, and a projected 38.8% in 2026, pushing capital expenditure toward $1.5 trillion (approximately NT$47.8 trillion). Taiwan’s share of U.S. imported goods grew from 1.8% in 2016 to 3.6% in 2024, and surged to 7.7% in the January–July period of 2026, significantly surpassing China’s 7.5%.

On listed company earnings, Lin Chi-chao pointed out that this year’s after-tax net profit year-over-year growth rate has been revised upward to 73%–74%, and next year could break through the historical high of NT$10 trillion. Taking Taiwan Semiconductor Manufacturing (2330.TW) as an example, this year’s estimated after-tax net profit is NT$2.6 trillion to NT$2.8 trillion (approximately $81.6 billion to $87.9 billion), accounting for approximately 38% of all listed companies, and could grow to NT$3.7 trillion to NT$3.8 trillion (approximately $116.1 billion to $119.2 billion) next year. Based on a 20–21x price-to-earnings multiple, the overall market capitalization of Taiwan-listed companies would have the capacity to challenge the NT$200 trillion scale.

The views of the two institutions are highly aligned in direction: Taiwan benefits from the structural advantages of the AI supply chain, and corporate earnings growth momentum is clear—this is the core factor supporting the medium- to long-term performance of the Taiwan stock market. Standard Chartered focuses on regional comparative advantages within a global allocation framework, while Cathay United Bank approaches the issue from macroeconomic and export structure perspectives. Both point to the profound impact of the AI capital expenditure cycle on Taiwan’s economy and corporate earnings.

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