Semiconductor stocks shaken by Nvidia management risks; Taiwan market also plunges
Late-session recovery follows remarks on KOSDAQ development and long-term investment incentives
Key Market Trends
① Jensen Huang variables overshadow CoreWeave relief
The domestic stock market experienced increased volatility as profit-taking from recent consecutive gains collided with risks surrounding Nvidia's management. Early trading was buoyed by CoreWeave's post-earnings surge in the U.S. and a broader rally in semiconductor stocks.
CoreWeave eased concerns over slowing AI investment by disclosing revenue growth, new orders, and plans for financing and infrastructure investment. The CEO's decision to halt share sales and demand exceeding supply further bolstered AI sentiment.
The mood shifted following reports regarding Nvidia CEO Jensen Huang before the market opened. Allegations of technology leaks to China, combined with personal life issues, sparked speculation about a potential leadership change, causing Nvidia shares to plummet in after-hours trading.
The market reacted sharply to each related report. Taiwan's stock market saw a significant decline led by semiconductors, and the domestic market mirrored the movement of Nvidia's after-hours stock. Conversely, some recovered losses on the view that a swift resolution regarding his position could reduce uncertainty.
② Samsung Electronics defends the index; policy expectations trigger late-session reversal
Samsung Electronics showed relative strength during the session, helping to defend the KOSPI. The stock benefited from its lower reliance on Nvidia and the potential for indirect gains should U.S. semiconductor regulations against China intensify.
Automotive components, entertainment, and some telecommunications equipment stocks also performed well. In contrast, secondary batteries, semiconductor materials, parts, and equipment, and securities faced selling pressure. Overall, decliners outnumbered gainers due to profit-taking following a two-day rally and the impact of options expiration.
Late in the session, policy expectations helped narrow losses. Investor sentiment, particularly on the KOSDAQ, recovered rapidly after the President mentioned measures to foster the KOSDAQ market and encourage long-term stock investment.
Although reports of a meeting regarding specific KOSDAQ measures were later clarified as inaccurate, the direct policy message late in the day refocused the market on potential KOSDAQ revitalization plans.
③ Foreign selling eases; bargain hunting emerges after forced liquidations
Foreign investors were net buyers in electrical/electronics, finance, pharmaceuticals, and transportation/warehousing, while selling machinery, transport equipment, services, retail, and metals. On the KOSDAQ, they bought entertainment stocks but sold semiconductor-related sectors.
Institutional investors were net sellers across most sectors, excluding retail and medical precision, though they made minor net purchases in KOSDAQ semiconductor stocks.
A notable recent shift is the easing of foreign selling intensity. Much of the forced selling from hedge funds, leveraged ETFs, and margin calls has been absorbed, and buying interest is emerging to capitalize on the price drops.
The KOSDAQ is also attempting a recovery after a rapid reduction in margin debt. Today's correction was driven more by profit-taking after a short-term rally and Nvidia management risks than by new major negative catalysts.
Supply, Demand, and Sectors
Foreign investors moved away from their recent one-sided selling trend by purchasing electrical/electronics, finance, pharmaceuticals, and transportation/warehousing. Conversely, selling pressure hit machinery, transport equipment, and retail.
Institutional investors were generally net sellers on the KOSPI, while showing a different trend on the KOSDAQ by slightly purchasing semiconductor-related stocks.
It is positive that foreign selling intensity is decreasing now that forced liquidations have subsided. However, increased institutional profit-taking suggests that new momentum is required for further gains following the recent sharp rebound.
Market Analyst's Perspective
There are now more variables affecting the market. With inflation, employment, interest rates, and U.S. politics in play, the AI market is being driven simultaneously by investment demand, policy, and management risks.
CoreWeave has demonstrated through actual orders and financing that demand for AI infrastructure remains robust. Conversely, Nvidia is being shaken by management risks unrelated to its earnings due to uncertainties surrounding CEO Jensen Huang.
Crucially, there is no clear trend of downgrading earnings forecasts for semiconductor companies. While some brokerage firms have lowered investment ratings, this has not spread into a broad shift in industry outlooks or profit projections. We are currently in a phase where stock price volatility is significantly outpacing fundamental earnings changes.
Domestically, we have seen a cooling of foreign selling alongside expectations for KOSDAQ development. With much of the margin, leverage, and hedge fund selling absorbed during the recent plunge, the market is now in a phase of confirming additional momentum following a technical rebound. It is necessary to continue monitoring stocks among existing leaders that maintain strong earnings evaluations, as well as those that have undergone corrections after cumulative institutional buying.
Data: Market Analyst's Stock Story t.me/shmstory
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This article is a reconstruction of a Telegram post by the Market Analyst, published with the author's consent. All content may contain errors and does not constitute a recommendation to buy or sell; it cannot be used as a basis for trading. The content of this post cannot be used as legal evidence under any circumstances.
