AI Semiconductor Market Ahead of NVIDIA Earnings Release: Manager Baek In-yeop's Strategy?

With NVIDIA's earnings release approaching in four days, market volatility is expected to increase. Experts agree that the long-term direction of AI semiconductor-related stocks will be upward. However, they stressed the importance of refraining from leveraged investments in such volatile market conditions, as it can increase the risk of liquidation during sharp declines.

It was advised that it is crucial to remain patient and steadfast in stocks with a clear direction, without being swayed by others boasting about short-term returns. This was emphasized through the analogy that those who go far must endure periods of being lost.

This indicates the possibility of a rotational upward trend through a seesaw game between the KOSPI and KOSDAQ markets, offering new opportunities for investors.

The U.S. bio sector has consistently shown an upward trend despite fluctuations in bond yields, indicating a weakening correlation with international yields. In contrast, domestic bio stocks are highly sensitive to U.S. bond yield fluctuations and are significantly affected. Currently, the domestic bio market continues to experience a bearish trend where positive news is not fully reflected, highlighting a clear divergence from the U.S. market.

An analysis suggests that a prolonged war would be difficult given the U.S. national debt reaching 40 trillion dollars. Therefore, it was proposed that the current moment of heightened geopolitical risk between the U.S. and Iran should be utilized as an opportunity for bottom-buying in the stock market. It was explained that war risk should be considered a long-term constant, and a strategy to seek investment opportunities through it is necessary.

It was emphasized that starting to buy after the index has surged might be too late. However, it was strongly advised to absolutely refrain from using leverage in the current phase, as it could be very risky. Special caution is also needed when investing in high-beta stocks with significant volatility.

Initially, bond yields showed a decline due to these purchases, but this effect was short-lived, and yields rose again. Despite verbal intervention from the Treasury Secretary, the market continued its index decline, indicating difficulties in stabilizing bond yields.

The possibility of using stablecoin issuance to prevent rising short-term Treasury bond yields was suggested. If stablecoins are issued based on U.S. short-term Treasury bonds as underlying assets, demand for these bonds will increase. This increased demand leads to higher short-term Treasury bond prices, which can ultimately induce a decline in yields. This is garnering attention as a new approach to stabilize the short-term Treasury market.

After Samsung Electronics announced its shareholder return policy, its stock price sharply declined in the aftermarket. During this process, a significant portion of capital that left Samsung Electronics was observed shifting to SK Hynix. This capital movement is analyzed as reflecting the market's assessment of the undervalued state of the two major semiconductor stocks. Investors are closely examining the undervaluation of both Samsung Electronics and SK Hynix.

Three key variables were highlighted for the market next week. First, NVIDIA's earnings announcement, to be released early Thursday morning, is expected to significantly impact the overall AI semiconductor market. Second, the Bank of Korea's Monetary Policy Committee interest rate decision, which will be a crucial indicator for assessing domestic economic conditions and monetary policy direction. Third, the release of the U.S. July Personal Consumption Expenditures (PCE) Price Index, a key reference for the Federal Reserve's future monetary policy decisions, with considerable ripple effects on global markets.

Foreigners net bought 286 billion won worth of Samsung Electronics, and institutions net bought 495.2 billion won. This result, contrary to intraday trends, suggests that foreign and institutional investors actively utilized bottom-buying opportunities after market close. This reversal in supply and demand could provide important implications for Samsung Electronics' stock price movement.

Jeju Semiconductor achieved an earnings surprise, recording operating profit of 12.1 billion won in Q2 and a cumulative 18.8 billion won for the half-year. Despite annual operating profit projected at around 40 billion won, its current market capitalization of 2.53 trillion won is considered excessively undervalued. This discrepancy is attributed to the lack of coverage reports from brokerage firms for Jeju Semiconductor, preventing proper market evaluation. Despite strong performance, the stock price remains stagnant due to insufficient market interest.

Samsung Securities' report on Hana Materials on August 14 set a target price of 75,000 won. Considering the current stock price of 53,000 won, this implies significant upside potential of over 40%. Hana Materials, expected to see long-term growth linked to the semiconductor materials, parts, and equipment (SOBUJANG) super cycle, is attracting investor interest due to the large discrepancy between its current and target prices.

Accelerated expansion of Samsung Electronics' Pyeongtaek 4 and 5 plants and SK Hynix's Yongin plant is increasing CAPEX investment, potentially leading to early equipment sales. The need for market expansion strategies linked to power devices and nuclear power sectors was also emphasized, indicating broad growth potential for the semiconductor industry.