The Kospi rose more than 5% in early trading as Samsung Electronics and SK Hynix each gained over 5% after US chip stocks rallied. The index is still down more than 40% from its summer peak, and both chipmakers trade below 3 times forward earnings, after a sell-off tied to AI financing concerns.
Korean Stocks Surge as Chipmakers Rebound on Dip Buying, Kospi Jumps More Than 5%
Samsung and SK Hynix trade at less than three times forward earnings
Mark
Why does a 5% jump matter when the index is still down more than 40%?
Mimi
Because it shows where buyers see value. Samsung and SK Hynix both trade at less than three times forward earnings, and they led the move.
Mark
Nvidia fell on the Huang scandal, yet Korean chipmakers rose. Why?
Mimi
Fibonacci's Jung In Yun argues investors are refocusing on fundamentals, since the headlines don't change AI demand or chip earnings prospects.
Luke
That's one fund chief's reading, though. The reporting doesn't show that investors actually weighed the scandal and dismissed it. The same day also brought lower oil and US chip gains.
Mimi
Fair. Several things moved together: Trump saying more Iran strikes weren't needed, and Anthropic unveiling new models before its debut.
Mark
And Taiwan fell far less than Korea.
Mimi
Yes, 16% from its record versus more than 40% for the Kospi from its summer peak. Yun says Korea was sold off disproportionately versus Taiwan and Japan.
Luke
Again, that's a growing sense he describes, not a measured fact. Also, this is early trading. We don't know where the Kospi closed.
Mark
What's the next test?
Mimi
Anthropic starts marketing its IPO Tuesday, and Nvidia reports earnings next week.
Luke
And the source doesn't say how the Huang situation resolves, so that remains open.
Il Polso
- Kospi rose more than 5% in early trading Tuesday
- Samsung and SK Hynix each gained more than 5%
- Kospi is down more than 40% from its summer peak; Taiwan down 16%
- Nvidia reports earnings next week; Anthropic IPO marketing starts Tuesday
The Kospi rose more than 5% in early trading as Samsung Electronics and SK Hynix each gained over 5% after US chip stocks rallied. The index is still down more than 40% from its summer peak, and both chipmakers trade below 3 times forward earnings, after a sell-off tied to AI financing concerns.
South Korea's Kospi jumped over 5% as Samsung and SK Hynix rebounded after a steep selloff, helped by lower oil prices and US chip gains despite the Nvidia and Huang controversy.
South Korea's benchmark Kospi index jumped more than 5% in early trading on Tuesday, pulled higher by its two heaviest names. Samsung Electronics and SK Hynix each rose more than 5%, as investors stepped back into the artificial intelligence trade after a punishing selloff.
The move followed strong gains in American chip stocks on Monday. Nvidia was the exception: its shares slumped as a scandal around chief executive Jensen Huang developed. Huang has disclosed an affair with a woman suspected of spying on behalf of China. Even so, Korean investors appeared to look past the story. Jung In Yun, chief executive of Fibonacci Asset Management Global, said buyers were refocusing on fundamentals, because the headlines do little to change underlying AI demand or semiconductor earnings prospects.
Two other developments helped the mood. Oil prices fell after President Donald Trump said further strikes on Iran would not be necessary. And Anthropic PBC unveiled new AI models ahead of its long-awaited Wall Street debut.
The rebound comes against a bruising backdrop. Korea's market was one of the biggest winners of the AI rally, and it has since taken much of the backlash. The Kospi is down more than 40% from its summer peak. By comparison, Taiwan's benchmark is down just 16% from a record high set earlier this month. On Monday the Kospi closed at its lowest level since early February, weighed down by concerns over how AI spending is being financed and by the impact of the Democratic sweep of the US Congress.
Valuations show how far the selling went. Both Samsung and SK Hynix are trading at less than three times their forward earnings estimates. Yun said there is a growing sense that Korean equities have been sold off disproportionately compared with Taiwan and Japan. With US chip stocks rising and oil falling, he said, sentiment is improving, positioning Korea's heavily sold-down chipmakers to lead a recovery.
Two events will test that view. Anthropic begins marketing its much-anticipated IPO on Tuesday. And Nvidia is due to report earnings next week, while the company deals with the fallout from Huang's disclosure. Whether investors keep their attention on demand and earnings, or turn back to the scandal, will shape whether Tuesday's jump is the start of a recovery or a pause in the slide.
Citazioni salienti
Investors are refocusing on fundamentals, as the headlines do little to change underlying AI demand or semiconductor earnings prospects.— Jung In Yun, CEO, Fibonacci Asset Management Global
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