NVIDIA-AI Global Rally
KOSPI rose only 0.13%
The artificial intelligence (AI) craze from U.S. semiconductor company Nvidia is giving global stock markets a boost. Following the New York stock market hitting an all-time high, warmth is spreading to European, Japanese, and Taiwanese stock markets. However, the Korean stock market appears to be relatively isolated from the global rally due to the wall of ‘Korea discount’ (undervaluation of the Korean stock market).
On the 22nd (local time) in the New York stock market, the Standard & Poor’s (S&P) 500 index closed at 5,087.03, up 2.11% (105.23 points) from the previous day, breaking an all-time high. The Dow Jones Industrial Index also rose 1.18%, surpassing its all-time record. The Nasdaq index also rose 2.96%. NVIDIA, which achieved an ‘earnings surprise’ the previous day, surged 16.4% that day, driving the rise of the New York stock market. Nvidia’s market capitalization increased by $277 billion (approximately 368 trillion won) in one day. Due to the ‘Nvidia effect’, the European and Japanese stock markets both broke through their highest points on the 22nd, and the Taiwanese stock market reached an all-time high again for two consecutive days on the 23rd, but on this day, KOSPI only rose by 0.13%.
Only Hynix benefits from HBM supply on domestic routes.
“Influence beyond past MS-Apple”
Jensen Huang’s assets increased by 10 trillion won in one day
The artificial intelligence (AI) revolution, led by U.S. semiconductor company NVIDIA, is raising global stock prices. In the securities industry, there is even an assessment that AI leader Nvidia’s influence on the global stock market has surpassed that of Microsoft (MS) and Apple in the past. While the stock markets of Japan and Taiwan, which have established a semiconductor alliance with the United States due to the ‘Nvidia effect’, are also hitting highs, only the Korean stock market is showing a sluggish trend, raising concerns.
According to the Korea Exchange on the 23rd, KOSPI rose only 0.13% compared to the previous day and closed at 2,667.70. The previous day, indexes in major countries such as the US, France, Germany, Japan, and Taiwan all hit record highs due to Nvidia’s ‘earnings surprise’, but KOSPI only rose by 0.41%. On this day, Taiwan’s Jiquan Index rose 0.19%, hitting an all-time high for the second day in a row. Japanese stock markets were closed for the Emperor’s birthday.
In the domestic stock market, only SK Hynix, which exclusively supplies high bandwidth memory chips (HBM) to Nvidia, is benefiting. Following a 5.03% surge the previous day, SK Hynix closed trading at 161,400 won, up 3.13% on this day, setting a new 52-week high for the second day in a row. Samsung Electronics, a leading domestic semiconductor stock, actually fell by 0.27%.
Regarding the Korean stock market being left out of the good news from Nvidia, Seo Sang-young, a researcher at Mirae Asset Securities, said, “Samsung Electronics, which has the largest presence in the Korean stock market, is missing from AI-related stocks, which has a big impact.” He added, “The weakness of our stock market is that there are no special beneficiaries other than SK Hynix.” explained. Above all, the absence of innovative companies that can lead the global market in the domestic stock market is pointed out as the biggest cause of the stock market slump. In the United States, Japan, and Taiwan, the performance of AI and semiconductor companies such as NVIDIA and TSMC is pushing up the stock market, but Korea’s leading companies are unable to escape from poor performance.
Ha Jun-kyung, a professor of economics at Hanyang University, said, “It is difficult to create innovative technologies and companies by following the success equation of catching up with the technology of advanced countries.”
NVIDIA’s strong performance appears to be boosting the entire global stock market. As NVIDIA’s performance increases, its competitor in the United States, AMD, is benefiting, and the Japanese stock market is also receiving strength as semiconductor companies such as Tokyo Electron are benefiting. Even as Taiwan’s Jiquan Index hit an all-time high, the stock price rise of TSMC, a partner of NVIDIA and the world’s largest foundry company, is believed to have played a driving role.
The securities industry is analyzing that NVIDIA’s dominance in the semiconductor market and global stock market will be strengthened for the time being. Hwang Min-seong, a researcher at Samsung Securities, said, “Nvidia has high graphics processing unit (GPU) technology, but what differentiates it from competitors is that it has to use CUDA, a GPU-specific programming language created by Nvidia to design AI chips.” He added, “For the time being, AI “Nvidia’s monopoly in the semiconductor market will continue,” he said.
As Nvidia’s stock price soars, CEO Jensen Huang is also on the verge of entering the world’s 20 richest people. According to the Bloomberg Billionaire Rankings, on the 22nd (local time), CEO Hwang’s asset value increased by more than $8 billion, reaching a total of $68.1 billion (about 90 trillion won). CEO Hwang was ranked 128th at the beginning of last year, but thanks to the AI craze, he jumped to 21st on this day.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.