Semiconductor Bull Market Ends Despite Nvidia Earnings, Power and Policy Stocks Emerge as New Leaders

Analysis indicates that Nvidia's earnings announcements are no longer acting as a strong momentum driver for stock market rallies. Many investors are already holding shares at peak prices, and without strong fund inflows into the market, it is difficult to drive price increases. There is also analysis suggesting that most of the upside momentum has already been exhausted.

The bull market driven by the semiconductor super cycle centered on Samsung Electronics and SK Hynix is deemed to have effectively ended. Prices are currently entering a phase of forming a bottom, but this is far from a phase of driving gains. In other words, rather than sharp increases, the market is expected to go through a stabilization phase.

There is a point that it's time to find alternative sectors due to the poor performance of Samsung Electronics and SK Hynix. Analysis suggests that investors should accept the index being trapped in a range as the new normal, and a market environment where large-cap stocks struggle to rise will continue. Therefore, the movements of lighter individual stocks are expected to be much more dynamic.

Analysis shows that nuclear power stocks are rising not only due to energy and utility-related factors but also because they serve as niche markets and policy stocks. Nuclear power stocks have become the center of the market because these are the sectors receiving the most investment, including investment agreements between Korean and U.S. governments. This demonstrates the growing importance of government policy-backed stocks alongside semiconductor mega-projects.

Current leading indices show that only small-cap and Kosdaq indices have potential for uptrends that could drive gains, according to analysis. Kospi is expected to fluctuate within a range, but small-cap index is forecast to potentially reach 3,000 points going forward. Based on past Operation Twist examples, the emphasis is on small-cap stocks having significant upside potential.

The core of the AI industry is divided into chips and power, and while the chip-related super cycle has already ended, power is now just opening the door to its super cycle, according to analysis. This suggests that surging energy demand in the AI era will become a new growth driver for the power industry.

Investor anxiety is growing over the decline in Samsung Electronics and SK Hynix share prices. Voices are calling for long-term holding of 3 to 5 years rather than reacting to short-term price movements. The advice is that enduring these declines as if leaving the shares to one's children is the most rational approach in the current situation.

Share buybacks are evaluated as a passive buying strategy and not a decisive factor in driving stock price rebounds. There is mention that share prices could break below recent lows even after buybacks, and analysis suggests it is difficult to expect strong upside momentum from share buybacks alone.

While in the past humans were the final consumers of electricity, artificial intelligence has become a new power consumer itself with its emergence, according to analysis. For artificial intelligence, power goes beyond being simply an energy source and serves as a growth driver, and increased power demand in the AI era is inevitable. This will serve as a factor further highlighting the importance of the power industry.

U.S. 10-year Treasury yields are expected to fluctuate within a range of 4.0% to 4.5%. This supports the assessment that high-interest-rate conditions will persist for an extended period. The possibility of future Federal Reserve intervention, such as Operation Twist, has also been raised.

Analysis shows that while the U.S. 10-year Treasury basis PER is 22x, the Magnificent 7 stocks, that is, big-tech companies, have PERs at 22x to 24x levels. This suggests that in terms of valuation, these stocks have already risen as much as they should, limiting additional upside potential. Therefore, there is a point that a cautious approach to big-tech companies is necessary.

The market from January to July this year was focused on large-cap semiconductor stocks, but now these stocks are struggling to perform and it is difficult to generate gains, according to analysis. In a range-bound market, stocks that have driven significant gains so far have nothing left to offer, the diagnosis goes. A forecast suggests that individual stock rallies are expected to begin in the second half of 2026.

From the second half of 2026 through the first half of 2027, individual stocks are forecast to lead the market due to index range-bound stagnation. The market will move in a self-directed manner, and a target has been set for Kospi and Kosdaq indices to reach 3,000 points by May next year. It is advisable to respond with a focus on growth stocks based on earnings.

Following the assessment that Samsung Electronics' major rally has been completed, voices are calling for position reduction among investors with large holdings. PBR (price-to-book ratio) of 1.1 to 1.2 is suggested as the optimal buying level, with the belief that this PBR will not break, and if it does, that would be the time to buy. A forecast also suggests a cycle where a bottom forms around 2028.

Advice was given that buying on the same day or the next morning after Nvidia's earnings announcement is not good timing. The strategy is to wait and see the opening-day volatility in the afternoon, observe the market settle, and then enter. The optimal buying window was suggested as the weekend or Monday.