KOSPI declined as much as 8% intraday on the 7th, prompting Samsung Securities to release an emergency market report titled 'Stock Market Decline Background and Response Strategy' analyzing the drop as a natural correction following rapid short-term gains rather than a trend reversal. The brokerage attributed the decline to profit-taking after KOSPI's approximately 100% surge in the first half of this year, the highest among major global stock markets, amid concerns over the sustainability of BigTech AI investments triggered by OpenAI's IPO delay and Meta's cloud business expansion. Samsung Securities stated that the actual basis for judgment will come from US BigTech companies' earnings announcements due at the end of this month, describing confirmation of hyperscalers' AI investment stance as the real turning point for assessing memory semiconductor industry conditions and domestic stock market direction.
Samsung Securities Assesses AI Investment Cycle as Ongoing
Samsung Securities evaluated that it is premature to conclude the artificial intelligence investment cycle has peaked. The brokerage characterized concerns about BigTech AI investment sustainability as unconfirmed worries, noting that OpenAI's IPO delay and Meta's cloud business expansion news have raised questions but lack concrete evidence. Samsung Securities stated: "The actual basis for judgment is the earnings announcements of US BigTech companies coming out at the end of this month. Whether hyperscalers' AI investment stance is reconfirmed will be the real turning point for gauging future memory semiconductor industry conditions and domestic stock market direction."
KOSPI Components Recorded 100% First-Half Gains Amid 148 Trillion Won Foreign Selling
Samsung Securities characterized the day's sharp decline as a natural correction process following short-term overheating concerns and profit-taking selling after KOSPI's approximately 100% first-half rise. In the first half of this year, Samsung Electronics and SK Hynix stock prices surged 177% and 305% respectively, while foreign investors net sold 82 trillion won worth of Samsung Electronics and 66 trillion won worth of SK Hynix during the same period. However, foreign ownership proportion within KOSPI actually increased from 36% at the beginning of the year to 40%, indicating selling capacity still remains according to the analysis.
Profit Peak-Out Concerns Emerged Following Samsung Electronics Q2 Results
Samsung Securities diagnosed that selling pressure from profit peak-out concerns at semiconductor companies expanded the index decline. On the 7th, Samsung Electronics announced maximum second-quarter results, but the view that growth rates themselves will inevitably slow from the second half due to base effects led to selling, according to the explanation.
Samsung Securities Identifies BigTech Earnings as Confirmation Point
Samsung Securities stated: "There is not yet clear evidence that this sharp decline will immediately lead to a trend-level departure. We will need to watch the clear confirmation point of BigTech earnings at the end of July."
FAQ
What caused KOSPI's 8% intraday decline on the 7th according to Samsung Securities?
Samsung Securities attributed the decline to natural correction following KOSPI's approximately 100% first-half surge, profit-taking after short-term rapid gains, and concerns about BigTech AI investment sustainability triggered by OpenAI's IPO delay and Meta's cloud business expansion news.
How much did foreign investors sell in Samsung Electronics and SK Hynix during the first half?
Foreign investors net sold 82 trillion won worth of Samsung Electronics and 66 trillion won worth of SK Hynix in the first half of this year, despite the stocks rising 177% and 305% respectively during the same period.
When will the key confirmation point for market direction occur according to Samsung Securities?
Samsung Securities identified US BigTech companies' earnings announcements at the end of this month as the clear confirmation point, stating that confirmation of hyperscalers' AI investment stance will be the real turning point for assessing memory semiconductor industry conditions and domestic stock market direction.
