Samsung Securities analyst Shin Seung-jin released a weekly investment strategy report on the 20th recommending investors consider additional purchases of AI-leading stocks following recent market corrections. The KOSPI index fell approximately 25% from its peak over the past month, driven by multiple AI-related market developments including Meta's cloud business announcement, Apple's China semiconductor purchase inquiries, and China's CXMT IPO success. Shin attributed the decline primarily to investor doubts about AI investment sustainability rather than fundamental changes in the AI cycle. The Korean stock market has experienced heightened volatility as global semiconductor companies' stock valuations rose relative to big tech firms, shifting traditional industry power dynamics.
KOSPI Stocks Decline Driven by AI Investment Sustainability Concerns
Shin Seung-jin, Samsung Securities Research Center Investment Information Team Leader, stated in the weekly investment strategy report that "the KOSPI recently plunged approximately 25% from its peak over one month." He explained that "various factors surrounding AI - including Meta's cloud business entry announcement, Apple's inquiries about purchasing Chinese semiconductors, China's CXMT IPO success, and the emergence of Kimi AI models - simultaneously shook investor sentiment."
The analyst noted these developments were not fundamentally new. "These issues have been continuously raised since last year," Shin said. "What's different from last year is that global memory semiconductor companies' stock prices have risen significantly compared to big tech firms. The fundamental reason for this decline is doubt about AI investment sustainability."
Shin highlighted the power shift in the semiconductor industry: "As the AI inference market blossomed, global semiconductor companies' profits exploded. The 'dominant-subordinate' relationship between big tech and semiconductor companies completely reversed, which was starkly reflected in stock prices during the first half." He added that "despite Samsung Electronics' quarterly operating profit exceeding NVIDIA's, investors still worry about the peak-out of the semiconductor cycle."
AI Investment Cycle Remains Intact Despite Market Volatility
Shin emphasized that factors indicating reduced AI investment remain absent. "Memory semiconductors are in the stage of mitigating previously extreme profit volatility through LTA (long-term supply agreements) with individual customers," he stated. "AI investment has now become an unstoppable arms race among global big tech companies, and various indicators suggest AI investment is highly likely to continue."
The analyst noted the disconnect between market fundamentals and stock price movements: "Nothing has changed in AI's direction, yet individual stock prices have fallen more than 30% from their peaks." He added that "with big tech earnings announcements approaching and Middle East issues resurfacing, short-term volatility expansion is highly likely to peak this week."
Samsung Securities Recommends Maintaining AI Stock Positions
Shin advised against selling strategies in the Korean stock market. "The AI investment cycle hasn't changed - only investors' psychology changed while watching plunging stock prices," he stated. "If you haven't used excessive leverage, now is the time to maintain AI-leading stock portfolios or consider additional purchases - it's definitely not a time to sell."
The weekly report concluded that current market conditions present an opportunity rather than a signal to exit AI-related semiconductor positions in Korean stocks.
FAQ
What caused the KOSPI to fall 25% from its recent peak?
According to Samsung Securities analyst Shin Seung-jin, the KOSPI fell approximately 25% over one month due to multiple AI-related developments including Meta's cloud business announcement, Apple's China semiconductor purchase inquiries, and China's CXMT IPO success. Shin stated the fundamental reason for the decline was investor doubt about AI investment sustainability rather than actual changes in market fundamentals.
Why does Samsung Securities recommend buying AI stocks now?
Samsung Securities analyst Shin Seung-jin stated that "the AI investment cycle hasn't changed" and "now is the time to maintain AI-leading stock portfolios or consider additional purchases - it's definitely not a time to sell." He emphasized that AI investment has become an unstoppable arms race among global big tech companies, with various indicators suggesting AI investment will continue despite recent stock price corrections of more than 30% from peaks.
