Nvidia Surges as Memory Stocks Fall: Why?

Nvidia jumped 8%, bringing a major shift in the market's long and short positions. Investors who had been short Nvidia while holding long positions in other chip stocks reversed their positions, and as Nvidia climbed, other chip stocks such as Micron fell.

Commentator Taber explained, "Nvidia rose 8% and swallowed up everything else. Nvidia had been moving sideways, and then it went up one tick while the others started moving. Even in the chip sector, the names that had good flows saw those flows drain as Nvidia rose. If you look at Micron's chart, it plunged while Nvidia went up," stressing the sharp concentration of market flows.

The remark appears to reflect the company already securing four years' worth of volume under long-term supply agreements (LTAs).

Taber added, "Memory will be short through the end of 2030. They're saying end of 2028, end of 2029, end of 2030. If you work backward from that basis, four years is a full contract. LTA contracts keep accumulating for four years," anticipating that the supplier advantage in the memory market would last a long time.

The critique is that the chairman, acting as chairman rather than as a manager, is overly involved in decision-making on large SK Hynix projects. There is also a critical view that Chey's external activities, including attending the Jeonnam investment announcement event, have little direct connection to SK Hynix's business.

Taber remarked, "How does it make sense for Chairman Chey, who has nothing to do with SK Hynix, to make decisions on a project where Hynix will spend trillions of won? Shareholder activism has actually called that out directly," pointing out that shareholder activism is questioning the chairman's management conduct.

This suggests the decision-making structure and the perspective of maximizing shareholder value are open to debate.

Salesforce unveiled its "Claude Force" service, linked with Anthropic's Claude, presenting a business model that coexists with the AI era.

Taber said, "The Salesforce CEO said, don't say that SaaS apocalypse nonsense, the malicious rumors are over. Then they launched lots of services linked with Anthropic and Claude, called Claude Force, and when they announced the Claude Force service, the market reacted with a 'wow,' seeing how they're introducing AI and coexisting, right?"

The announcement sent Salesforce shares up 22%, and other large-cap software stocks such as CrowdStrike rose 12–22%, a positive effect across the software sector.

Dollar Tree posted revenue and net income above market expectations, yet its shares fell. Ahead of the Jackson Hole meeting, a hawkish mood spread, and concern over prolonged high interest rates dampened investor sentiment toward consumer staples stocks.

Taber said, "The numbers came out well. Revenue came in a bit above market expectations, and net income was good too, but the stock couldn't turn positive and just lay flat."

Powell ended his remarks in a firm tone without taking questions, which hit the market hard.

Taber recalled, "That was Chair Powell in 2022. At that Jackson Hole meeting, he spoke for about eight minutes, maybe 8 minutes 30 seconds, and went straight in without taking any Q&A. And that day the Nasdaq fell 7%," reminding viewers of the market's past reaction.

It will proceed as a rights issue for unsubscribed shares allotted to existing shareholders, with 290 billion won used for facility funding and the remaining 2.7 trillion won used for M&A.

Taber specified, "Samsung Bio is doing a rights offering. They say it'll be a rights issue for unsubscribed shares allocated to existing shareholders. 290 billion for facility funds, and 2.7 trillion for M&A. They're buying a peptide CDMO company."

From the shareholder's perspective, this could lead to dilution of asset value. In particular, whether major shareholders participate in the rights offering is expected to be a key variable in defending against shareholder value dilution.

Taber said, "If there's money there, and you hit them with a rights offering, shareholders might feel a bit bad about it," speaking for the shareholders' feelings.

These countries are reportedly declaring their vessels to Iran, shipping cargo out of the Strait of Hormuz, and transshipping it to other vessels in international waters.

This is thought to be a move to evade U.S. sanctions on Iran.

As the Middle East war drags on without resolution, a new geopolitical order appears to be taking hold. This situation is limiting the decline in U.S. Treasury yields and weakening market expectations for rate cuts.

Taber noted, "The war just keeps dragging on... Will rates come down easily? They won't come down easily. Then the market keeps getting shaken by even a small poke," warning that market volatility could persist.

As a result, a prolonged Middle East risk could deepen instability in global financial markets.

Corporate earnings releases have generally come in above market expectations. Looking at the earnings announcements, most stocks posted revenue and net income above expectations, shown in red. Yet despite these strong results, some stocks have seen their prices plunge.

Taber stressed, "Overall, the numbers came out well. Look at the earnings releases, they're all red. All above expectations. If the numbers came out short and it got crushed, I'd say there's a real problem, but that's not the case. The numbers are coming in better than expected across the board," emphasizing that the earnings themselves are not the issue.

This suggests that, as seen in the declines of some tech stocks such as Marvell, stock prices can correct regardless of earnings when companies issue conservative forward guidance or fail to fully meet market expectations.

Combining past statistical data with human-index backups, the price has fallen and is forming a triangle convergence pattern, with the 20-day line and other moving averages converging.

Taber said, "In this situation, it's very likely to move sideways. Based on past statistical data and human-index backups, it's coming down like this, the 20-day line is gathering, and that's what a triangle convergence typically looks like." For now, the focus should be on individual selling and shifts in supply and demand.

The market has mentioned a buyback scale of around 15 trillion won, but with no clear execution plan, investor expectations remain low.

Taber stressed, "Then a concrete number for the buyback needs to come out," explaining that share buybacks could be an important driver for resolving market distrust and lifting the stock price.

Because the market distrusts financial forecasts and management decisions, the point is raised that Samsung Electronics needs an active shareholder return policy.

Taber compared it, saying, "Well, my nephew says he's running a business, so you have to give him money. You have plenty of money, yet it still feels bad," voicing shareholders' sentiment. Profits from Samsung Electronics flowing into investments in other affiliates are a source of dissatisfaction for shareholders who want to maximize shareholder value.

Attention is focused on how tonight's remarks by Fed Chair Jerome Powell will affect the bond market. If Powell offers comments that could benefit the bond market, the market could surge.

Taber said, "If Mr. Kevin says something truly helpful for the bond market tonight, it'll fly. Then next week you could see Samsung Electronics pushing above 300,000 won right away," suggesting that Powell's remarks could have a decisive impact on Samsung Electronics' share price as well.

However, the market expects the Fed chair will not put forward market-friendly measures such as intervening in the Treasury market.

The assessment is that the current price level is not an environment where investors are likely to be badly let down.

Taber advised, "If you buy Samsung Electronics now with the mindset of selling when it rises 10% or 15%, and accumulate on that basis, it's not an environment where you'll be badly let down right now," presenting an investment strategy through year-end.