Fueled by the positive news of a collaboration with Alphabet (GOOGL.US) on AI chips, MediaTek's stock price surged powerfully, accumulating a 19% gain over two days to set a new historical high, rapidly igniting market investment enthusiasm. The Taipei-listed company's shares jumped 8.6% on Monday, marking a two-day cumulative increase of 19% and closing at a record peak. This rally extends its two-month upward trend as market recognition grows regarding MediaTek's involvement in developing Alphabet's Tensor Processing Units (TPUs) for artificial intelligence applications. As holdings in Taiwan Semiconductor Manufacturing Company (TSMC) hit regulatory limits, some fund managers are pivoting to other AI-themed stocks like MediaTek, opening up new investment fronts. MediaTek's strategic shift from its core smartphone chip business towards higher-margin custom AI solutions has positioned it as a significant alternative. Analysts, including Morgan Stanley's Charlie Chan, wrote in a report last Friday that they see "significant potential" in MediaTek's AI-specific integrated circuits. The analysts added that, although Alphabet is also collaborating with Broadcom (AVGO.US) on TPUs, MediaTek could capture more growth as it reallocates more smartphone-related resources to AI-centric chips. On Monday, MediaTek, alongside other major tech firms including chipmakers Nanya Technology and United Microelectronics Corporation (UMC), propelled Taiwan's benchmark Taiex index to a historic high. Shares of TSMC fell 0.9%. Morningstar analyst Phelix Lee noted that MediaTek's latest performance guidance appears conservative, reflecting only the outlook through October and orders from Alphabet. He suggested the market likely hopes the company will ultimately exceed its targets.