NVIDIA Boosts Domestic Semiconductor Stocks… Q3-Q4 Expected to Be Range-Bound

NVIDIA has provided long-term revenue guidance through fiscal year 2028, targeting a 70% increase in revenue. Unlike typical short-term outlooks, this unusually long-term commitment to company growth has significantly impacted the market. Ha Chang-wan, CEO, stated, "I think the discussion about fiscal year 2028 was quite significant. Usually, they provide a short outlook, but they presented a very long-term forecast all at once. They also mentioned a 70% increase in revenue." Along with this, NVIDIA also announced strengthened shareholder return policies, committing to return 50% of free cash flow to shareholders.

NVIDIA's earnings announcement and long-term guidance are expected to positively impact the domestic semiconductor market. Key domestic semiconductor companies such as Samsung Electronics and SK Hynix are anticipated to benefit. Ha Chang-wan, CEO, commented, "Firstly, it's natural for Samsung and Hynix to perform well today. And if the supply and demand aspects support it, that would be very helpful." Considering foreigners' buying trends and futures positions from the previous day, NVIDIA's rally in the U.S. market is analyzed to have a positive impact on domestic supply and demand as well.

Influenced by NVIDIA, SK Hynix ADR (American Depositary Receipt) rose over 4.5% in the after-market, with its price increasing by more than $10 per share. This demonstrates that NVIDIA's earnings announcement significantly improved investor sentiment towards domestic semiconductor companies like SK Hynix. Ha Chang-wan, CEO, explained, "SK ADR went up about 4.5% in the after-market, didn't it? It increased by more than $10 per share, so you can see it rose quite significantly," emphasizing SK Hynix's strong upward trend.

With the U.S. White House executive order strengthening regulations to use American-made materials for power equipment, domestic power equipment companies are expected to benefit. South Korea has a very high proportion of transformer exports to the U.S., allowing it to anticipate indirect benefits from the strengthened regulations. Ha Chang-wan, CEO, explained, "President Trump issued an executive order from the White House. There was a regulation to use American materials for power equipment. As a result, South Korean transformers have a very high proportion of exports to the U.S." Accordingly, there is a possibility of a rotation in ultra-high voltage, special transformer, and wire-related stocks.

Construction stocks have recently formed themes around nuclear power and reconstruction issues, emerging as a stable investment due to increasing demand for power supply infrastructure driven by data center expansion. Particularly, as power shortages in data centers become a hot issue in the U.S. market, expectations for related infrastructure construction are growing. Ha Chang-wan, CEO, said, "Construction has been good recently with nuclear power. Data center power shortage was a hot issue in the U.S. market. Among construction stocks, I think those involved in nuclear power will be more stable," highlighting the stability of companies like Hyundai Engineering & Construction or GS Engineering & Construction that include nuclear power-related businesses.

After their respective investor days, the stock reactions for LG and Hyundai Motor were markedly different. LG saw a positive effect with robot stocks rising together due to robot collaboration issues, while Hyundai Motor received a lukewarm market response to its Investor Day presentation, being evaluated as a laggard. Ha Bono, CEO, commented, "In Hyundai's case, the Investor Day response was so poor that it might be considered a laggard. LG saw some positive effects." This suggests that investors are evaluating the future growth engines of the two companies differently.

Analysis suggests that Hyundai Motor's Investor Day presentation failed to meet shareholders' expectations. In particular, it was pointed out that the presentation content, overly focused on the automotive industry, actually reduced stock appeal. Ha Bono, CEO, commented, "Making the company seem too much like a car company was not a good choice for the stock price. They only talked about batteries and left." The absence of specific mentions of robot-related businesses like Boston Dynamics, and the battery technology-centric presentation, showed a disconnect from shareholders' expectations for future growth engines. This reinforced the image of a traditional car company rather than an innovative one, negatively impacting investor sentiment.

The current market shows low liquidity with trading volumes below 30 trillion won, and a prominent concentration of supply and demand in top-tier market capitalization stocks. This concentration can lead to short-term profit-taking in non-core industries. Ha Bono, CEO, analyzed, "If market liquidity concentrates in one direction, especially towards top market capitalization stocks, there can be some profit-taking in industries that are not core." Investors need to be aware of the supply and demand imbalance between core and non-core industries and devise profit-taking strategies accordingly.

The substrate industry is generally maintaining a positive atmosphere, with a persistent supply shortage. Considering the recent trend of expanding investments by big tech companies, the substrate industry is highly likely to benefit from this, according to analysis. Ha Bono, CEO, stated, "The substrate sector generally has a good atmosphere. There are continuous talks of production supply shortages, and looking at the recent trends of big tech companies' investments, the substrate sector is highly likely to benefit." Samsung Electro-Mechanics, in particular, is a stock with significant passive demand influence, and is expected to attract more attention amidst this positive overall industry trend.

When there is strong inflow of futures supply and demand into the market, institutional investors' buying also intensifies and tends to concentrate on large-cap semiconductor stocks such as Samsung Electronics and SK Hynix. Ha Bono, CEO, explained, "If futures supply and demand become very strong, institutional supply and demand will strengthen and largely concentrate on Samsung and Hynix." This illustrates a market characteristic where foreign supply and demand and program trading are closely linked, and large-cap semiconductor stocks play a crucial role in leading the overall market's supply and demand trends.

A strategy for constructing a successful stock portfolio suggests that top-tier market capitalization stocks, or 'leader stocks', must be included. Ha Chang-wan, CEO, emphasized, "If your stock portfolio, for example, of five or ten stocks, doesn't include one or two stocks from the top 5 or 6-7, then you are not investing correctly." It is explained that stable returns can be expected by approaching not just large-cap stocks, but specifically 'leader stocks' that drive the market, as the core of the portfolio.

Silicon2, a cosmetics-related stock, experienced a stock price decline due to supply exodus after breaking its previous high. This is analyzed as investors' movement for short-term profit-taking. Ha Chang-wan, CEO, explained, "It's a short-term breakout from the previous line, so some supply is leaving, and everyone is recently profitable, so they sell quickly and move on, thinking it's not cosmetics today." It appears that a rotation of trades occurred, with investors selling profitable stocks and moving to others. This phenomenon shows a typical change in investor sentiment that appears after a short-term overheating of a specific sector. When stock prices surge, profit-taking often leads to short-term corrections. Investors should not only focus on short-term returns but also consider the overall market trend and supply and demand situation comprehensively to approach investments cautiously.

Stablecoin-related stocks are expected to see a concentration of supply and demand due to major events scheduled for September. A token buyback is set for September 9th, and the Clarity Act-related schedule is on September 15th. Ha Chang-wan, CEO, mentioned, "The events are scheduled starting September 9th, right? The token buyback part and then the Clarity Act-related schedule on September 15th, so supply and demand might concentrate before then, and you need to watch the results," advising investors to monitor supply and demand changes and legislative outcomes around these dates. Such major events could increase volatility in the stablecoin market and significantly impact the stock prices of related companies.

Compared to the opening of the market, foreign and institutional buying is flowing in, but individual investors have continued selling for two consecutive days. This can be interpreted as short-term profit-taking and will be an important indicator for gauging market direction. Ha Chang-wan, CEO, emphasized, "Following yesterday, individuals have been selling for two trading days. So, you must also look at today's margin loan balance." In particular, the margin loan trend will be a key indicator for determining short-term profit-taking in the market, and the impact of changes in individual investor sentiment on the market should be closely watched. Currently, market liquidity is insufficient, and if individual selling continues despite the net buying by foreigners and institutions, the overall upward momentum of the market may be limited. Investors should closely observe this supply and demand imbalance and changes in margin loans to formulate investment strategies.

For the second half of this year, the domestic stock market is expected to be range-bound, between 7,500-7,800 points at the top and 5,500-6,000 points at the bottom. Analysis suggests that due to insufficient trading volume, volatility centered on short-term theme stocks is likely to intensify. Ha Chang-wan, CEO, advised, "To move past short-term volatility and last long-term, you need to take a deep breath and reassess, and clarify your position." Therefore, investors should clearly distinguish between trading and mid- to long-term investment positions and formulate strategies appropriate for market conditions. For the mid- to long-term, it is important to maintain a portfolio centered on 'leader stocks' that drive the market and not be swayed by short-term volatility. In a range-bound market, sharp fluctuations in specific themes or stocks occur frequently, making cautious approaches and risk management essential.

Although big tech companies continuously issue positive earnings forecasts, questions about growth rates in the next 1-2 years are raising concerns, creating a discrepancy between current performance and future value. Analysis suggests that rather than accepting companies' optimistic forecasts at face value, it's necessary to filter them with caution. Ha Chang-wan, CEO, noted, "Companies continue to talk positively. So, there's clearly a discrepancy. I believe we need to make a judgment, and while companies are likely to speak favorably about their profits and forecasts, we need to filter that information." However, supply shortages and increased demand are expected to support the continued upward trajectory of big tech companies.