Nvidia Tailwind Lifts Korean Chip Stocks; Second-Half Market Seen Range-Bound

Unlike the usual short-term outlooks, the company unusually committed to growth from a long-term perspective, which had a large impact on the market. CEO Ha Chang-wan said, "The fact that they talked about fiscal 2028 was, I think, quite significant. Usually they give short-term guidance, but this time they laid out a very long-term outlook at once, and said revenue would grow 70%." Nvidia also strengthened its shareholder return policy, announcing it would return 50% of free cash flow to shareholders.

Nvidia's earnings and long-term guidance are expected to have a positive effect on Korea's semiconductor market as well. Major Korean chipmakers such as Samsung Electronics and SK hynix are expected to benefit in particular. Ha Chang-wan said, "It's natural that Samsung and hynix should do well today. And if supply-demand conditions provide support, that would help a lot." Given foreign investors' buying the previous day and their futures positioning, analysts believe Nvidia's gains in U.S. markets will also have a positive effect on Korean supply and demand.

This shows Nvidia's earnings announcement significantly improved investor sentiment toward Korean chip companies including SK hynix. Ha Chang-wan explained, "The SK ADR rose about 4.5% in after-hours trading? With more than $10 per share added, you can see it went up a lot," emphasizing SK hynix's strong rally.

Korea exports a very high share of its transformers to the U.S., so it can expect a windfall from the tougher rules. Ha Chang-wan said, "President Trump signed an executive order at the White House. It contains rules requiring the use of U.S. materials for power equipment, and because of that, Korea's transformer exports to the U.S. account for a very high share." Rotation into high-voltage and specialty transformer and cable-related stocks is therefore likely.

In particular, power shortages for data centers have become a hot issue in the U.S. market, raising expectations for related infrastructure construction. Ha Chang-wan said, "Nuclear power has been good for construction recently. Power shortages for data centers were a hot issue in the U.S. market. Among construction stocks, the ones with more nuclear business should be more stable," pointing to the stability of companies with nuclear-related projects such as Hyundai E&C and GS E&C.

Stock reactions to LG and Hyundai Motor after their investor days differed sharply. LG's robot-partnership news lifted robot stocks together and had a positive effect, while the market's response to Hyundai Motor's investor day was lukewarm, and it is viewed as a late mover. Analyst Ha Bo-no said, "Hyundai's investor day got such a poor reaction that it should probably be seen as a late mover. LG got some benefit." This suggests investors are valuing the two companies' future growth drivers differently.

Analysts say Hyundai Motor's investor day failed to meet shareholder expectations. Critics pointed out that a presentation focused too heavily on the automotive business actually weakened the stock's appeal. Ha Bo-no assessed, "Keeping the company viewed as an automaker was probably a bad choice for the stock. They only talked about batteries and moved on." The presentation contained no concrete mention of robotics businesses such as Boston Dynamics, and its battery-centered focus diverged from shareholders' expectations for future growth drivers. This reinforced the image of a traditional automaker rather than an innovative company, weighing on investor sentiment.

The market currently shows low liquidity, with trading value below 30 trillion won, and capital is conspicuously concentrating in top market-cap stocks. Such concentration can lead to short-term profit-taking in non-leading industries. Ha Bo-no analyzed, "When the market's flows concentrate on one side, especially the top market-cap names, some gains can come out of non-leading industries." Investors need to watch the supply-demand imbalance between leading and non-leading industries and plan profit-taking strategies accordingly.

The substrate industry is maintaining an overall positive mood, with ongoing talk of supply shortages in production volume. Given the recent expansion of big tech investment, analysts say the substrate industry is likely to benefit. Ha Bo-no said, "Substrates are generally in good shape. There's continuing talk of production shortages, and looking at recent big tech moves on investment, substrates are more likely to benefit." Samsung Electro-Mechanics in particular is a stock with large passive-fund flow influence and is expected to draw more attention amid this positive industry-wide trend.

Ha Bo-no explained, "If futures flows get very strong, institutional flows strengthen too, and that's when a lot of it goes to Samsung and hynix." This shows how the market moves with foreign flows and program buying closely linked, and that large chip stocks play an important role in leading overall market flows.

A strategy was presented that a successful stock portfolio must include top market-cap stocks, that is, 'leading stocks' or 'core stocks.' Ha Chang-wan stressed, "If, among your holdings, say five or ten stocks, you don't have one or two from the top 1 through 5, 6, or 7 ranks, then you're investing wrongly." The explanation is that approaching the market from the perspective of market-leading 'core stocks,' not just large caps, and making them the core of the portfolio is the way to expect stable returns.

This is read as investors' short-term profit-taking. Ha Chang-wan explained, "It broke through the previous short-term line, so the flows dropped off, and since everyone has gains, they ask whether it's not cosmetics today and sell quickly to move on." It appears a rotation-style trade took place, with investors selling profitable stocks and moving to others. Such moves are a typical shift in investor sentiment after a short-term overheating in a particular sector. When prices surge, profit-taking selling often follows and brings short-term corrections. Investors should look at the overall market trend and supply-demand conditions rather than focusing only on short-term returns, and approach carefully.

Stablecoin-related stocks are expected to see flows concentrate ahead of key events scheduled for September. A token buyback is set for September 9, and the Clarity Act-related schedule falls on September 15. Ha Chang-wan said, "The events are set from September 9. The token buyback and the Clarity Act are on September 15, so flows may concentrate before then, and it's worth watching those results." He advised investors to watch the supply-demand changes that may appear before and after these dates and the outcome of the legislation. Such key events can heighten volatility in the stablecoin market and have a major impact on the share prices of related stocks.

While foreign and institutional investors are buying compared with the start of trading, retail investors have continued selling for two straight days. This can be read as short-term profit-taking, and it will be an important indicator of the market's direction. Ha Chang-wan stressed, "Individuals have been selling for a second straight trading day, so you should definitely check margin loan balances today too." Margin loan trends appear to be a key indicator of whether short-term profit-taking occurs, and attention should be paid to how changes in retail sentiment affect the market. With current market liquidity insufficient, if retail selling continues despite foreign and institutional net buying turning, the market's overall upward momentum could be limited. Investors should closely watch these supply-demand imbalances and changes in margin loans when setting their strategies.

Analysts say a lack of trading value makes it likely that volatility will intensify centered on short-term theme stocks. Ha Chang-wan advised, "To get through short-term volatility and last over the medium to long term, you'll need to catch your breath, take some profits, and clearly set your positions." Investors should therefore clearly distinguish between trading and medium- to long-term positions and build strategies suited to market conditions. Over the medium to long term, it's important to keep a portfolio centered on the leading 'core stocks' that will drive the market and not be shaken by short-term volatility. In a range-bound market, sharp rallies and drops in particular themes or stocks occur often, so a cautious approach and risk management are essential.

Analysts say optimistic corporate projections should be filtered rather than accepted at face value. Ha Chang-wan said, "Companies keep saying good things, so a gap has clearly formed, and you have to make a judgment. Companies are likely to present their profits and forecasts favorably, so you do need to filter them." Still, supply shortages and rising demand are expected to support the continued upward direction of big tech companies.