PTT Hot Topic: Will Taiwan stocks’ rise above 40,000 points mirror Japan’s bubble crisis?

Taiwan stock market weighted index surged by 1,218 points on April 24, closing at 38,932 points. On the 27th, trading opened and pushed straight through the 40,000-point threshold. However, on PTT, someone asked, “If the Taiwan stock market hits 40,000 points, will it burst like a bubble the way Japan did back then?” The post has already drawn hundreds of people to discuss it.

PTT viral post: Will Taiwan stocks repeat Japan’s bubble?

The original poster said: “I’ve been thinking about something lately. If one day Taiwan stocks really surge to 40,000 points, will it directly burst into a bubble the way Japan did back then? Japan also kept rising all the way, until everyone felt it wouldn’t fall—then when it crashed, it caused decades of disappointment. Taiwan now is kind of similar. One ETF is more expensive than another, high-dividend yields are treated as a guarantee to buy, and a bunch of people say they’ll just buy with their eyes closed and profit.

But others say it’s not the same. Taiwan has AI and semiconductors. Something like TSMC actually makes money, not like Japan back then where it was just random speculation. If it really surges to 40,000, then is Taiwan’s official takeoff starting from a long-term growth point with a bubble high ready for a harvest, or will it kill a portion first somewhere in the middle before rising again? Or is it that we’re already on the edge of a bubble right now?”

Netizens: Based on the P/E ratio, it’s still pretty cheap

After the article was posted, the comments instantly broke 100. The P/E camp directly hauled out numbers to slap back.

Someone said: “You misunderstood. A bubble doesn’t just mean prices are very high—it refers to the gap between price and value. For example, a Toyota Altis sells for 2 million, and a Porsche 911 sells for 8 million. Which has the bigger bubble premium? It’s not the 911 that looks expensive—the bigger issue is that the Altis’s price is far off from its value. Using this perspective, at the peak of the Japanese stock bubble, the P/E ratio was 70x, but when Taiwan stocks hit 40,000 points, the P/E ratio is about 28x. If you use this year’s estimated earnings to calculate the forward P/E, it’s only 18x—compared with Taiwan’s historical long-term average of 16x, the bubble is so small it’s practically negligible.”

This long thread was boosted heavily and was considered the most rational post in the entire discussion. Others also thought: “If you want a Japanese-style bubble, at least now you’d need to reach 80,000 points. During the Japanese bubble, the PE Ratio was around 60x; Taiwan’s is only around 20—so isn’t it still far better?”

On the other hand, someone said: “People were calling bubble at 20,000 points, then at 30,000 they kept calling it, and at 40,000 they’re still calling it—let’s see what happens when it hits 50,000. AI hasn’t even kicked into gear yet; what bubble is there supposed to be? Yeah yeah, AI has no real output, and even the U.S. mega-cap seven and OpenAI are dumb—throwing several trillions into continuing R&D on things with no output.”

Some netizens felt there is a bubble risk, but it hasn’t affected things yet: “Not now. The GG growth potential and fundamentals are still there. But Taiwan stocks’ core players are nearly 50% dependent on GG, and GG is about 70% foreign-investor. When leverage of 2x becomes mainstream, and financing reaches a new high in more than 20 years (the last time was the 2000 internet bubble), that’s definitely a big bomb, and the fuse isn’t even in their own hands. The party might continue for a few more years—the timing to exit has to be tracked precisely.”

Another camp’s take: Tariff agreements are the real risk

Another camp believes AI’s profit model hasn’t taken shape yet. The money being made right now fundamentally can’t match the capital being put in. Once the profit model can’t keep up with capital expenditures, the bubble will break. Then the global economy will face a serious downturn.

Some netizens also said: “The Japanese bubble happened because the U.S. forcibly pressured industries to move and forced currency-value adjustments—that’s how it became a bubble. They were originally called strong economic development. If Taiwanese people still don’t see clearly, you’re going to become the next one.” Similar claims also include: “The $500 billion deal with the U.S., plus moving the tech industry chain—if it’s really carried out, Taiwan will definitely be in trouble. After Japan signed the Plaza Accord, its stock market was pumped upward and then crashed four years later. If Taiwan signs the tariff agreement, and if $16 trillion flows out and the tech industry moves offshore, that’s not a good thing.”

The P/E camp brings out data and argues that Taiwan’s 28x can’t be compared to Japan’s 70x at the time. The AI faith camp firmly believes that after the mega caps throw several trillion down, it’s only just starting now. The mockers focus specifically on empty-handed netizens who talk from 18,000 to 38,000. The structural warning camp points out that financing is at a new high, industry concentration is rising, and that tariff agreements are the real risk—because the fuse isn’t in their own hands.

What’s interesting is that this time, the “bubble camp” didn’t end up overwhelmingly in the majority. Instead, the P/E camp that brought data was the one most pushed to the front. Compared with the atmosphere during the 20,000-point and 30,000-point periods, Taiwanese retail investors’ discussion language has clearly upgraded over the past two years—from emotion-calling for a collapse to starting to debate using PE Ratio, financing balances, and the Plaza Accord. But the market always grows amid half-belief and half-doubt.

This article was hotly discussed on PTT: “Will Taiwan stocks, after breaking above 40,000 points, repeat Japan’s bubble crisis?” first appeared on Lianxin ABMedia.