(Bloomberg) — A rally in shares tied to artificial intelligence helped Asia’s stock benchmark wipe out losses sparked by the Iran war and climb back to an all-time high.

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The MSCI Asia Pacific Index jumped as much as 2.3% on Monday, the most since April 8. Tech-heavy benchmarks in South Korea and Taiwan surged more than 4% each. The moves came after the S&P 500 Index extended a record-breaking streak Friday to mark a fifth week of gains, following solid earnings from tech mega caps.

The AI theme — a dominant feature of markets before the outbreak of the Middle East conflict — has returned to the forefront as last month’s ceasefire agreement between the US and Iran calmed investor nerves. Asia’s stock benchmark surged more than 13% in April, erasing almost all of the declines suffered in March. President Donald Trump said over the weekend that the US will begin guiding some neutral ships trapped in the Persian Gulf out through the Strait of Hormuz starting Monday.

Asia has emerged as a key pillar of the AI boom, combining its dominance in semiconductor manufacturing with rapidly scaling data infrastructure. At the heart of it are three companies that provide essential hardware for AI: Taiwan Semiconductor Manufacturing Co., the world’s largest chip foundry, and South Korea’s leading memory makers Samsung Electronics Co. and SK Hynix Inc.

Shares of SK Hynix soared nearly 13% on Monday while TSMC’s jumped 6.6%. Samsung’s stock jumped more than 5%. A gauge of Chinese tech shares listed in Hong Kong climbed as much as 3.7%.

Markets like South Korea are currently performing well because of this AI-driven trade or hype, Dilin Wu, a research strategist at Pepperstone Group, said in a Bloomberg TV interview. “I would be cautiously optimistic on the Asian market in general,” as the geopolitical uncertainty and high oil prices may be a constraint to equities, she said.

Meanwhile, the MSCI Asia Pacific excluding Japan Index already hit a record, rising as much as 3.1% on Monday. Markets in mainland China and Japan were among those shut for holidays.

Sectors to Watch

• Chinese property developers jumped in Hong Kong on optimism that home sales are recovering on the back of local government incentives.

• Shares of Henderson Land and Link REIT gain as much as 6% and 2.7%, respectively, after Morgan Stanley upgrades them to overweight from equal-weight on Hong Kong’s property market recovery broadening beyond the residential sector.

• China’s electric vehicle makers rise after reporting robust wholesales data in April thanks to resilient overseas demand. BYD’s domestic and export volumes topped consensus projections, according to analysts.