Expectations are growing for Samsung Electronics' performance improvement and stock price increase in the second half, driven by its potential to lead the HBM4 market and a turnaround in foundry profitability.
Concerns about leveraged investments concentrated in a single stock exacerbated the situation, placing a significant burden on the market.
Professor So Hyun-chul stated, "July was truly a nightmare, and the listing of CXMT added another layer of fear. These two factors, combined with concentrated leveraged investments in single stocks, made it a very difficult month for individual investors."
While academia defines AGI as AI capable of performing all tasks like humans, the industry tends to consider AI that performs beyond human capabilities in specific areas as AGI.
Despite these definitional differences, performance improvements in domain-specific AI, such as OpenAI's Astra, are consistently ongoing.
Concerns regarding off-balance sheet debt of hyperscaler companies have been raised in connection with rising US Treasury yields, but analysis suggests these worries are exaggerated. While the on-book debt of the four hyperscalers is approximately $550 billion, it is estimated to reach a total of $3 trillion when off-balance sheet debt is included.
However, given that these companies' annual revenue ranges from $1.85 trillion to $2 trillion, and EBITA is between $600 billion and $700 billion, it is believed that the debt can be fully repaid within 3-4 years.
Experts emphasize the robust financial health of hyperscalers, stating, "This fear seems a bit excessive."
Analysis indicates that over 60% of the factors determining the US Consumer Price Index (CPI) are linked to oil prices, making this a critical variable for future interest rate policy decisions. Recent increases in oil prices could lead to higher Producer Price Index (PPI), exacerbating inflation concerns.
Considering this situation, cautious observations suggest a high probability that the Federal Reserve (Fed) will freeze interest rates in its upcoming decision next week.
News that former President Donald Trump had a phone call with Russian President Vladimir Putin for over an hour, achieving significant progress on a solution to the Ukraine war, has raised hopes for an easing of geopolitical risks. Simultaneously, Trump's firm stance on Iran is expected to deepen Iran's isolation.
Experts referred to President Nixon's truce agreement with North Vietnam in 1972, predicting a 'October surprise' where President Trump could bring about changes in the international situation through a major political event in October.
Such an easing of geopolitical risks could have a positive impact on the global economy, especially contributing to oil price stability and a recovery in investment sentiment.
Trump's diplomatic actions are expected to become more prominent leading up to the presidential election, serving as a significant variable that could also influence the stock market.
A positive outlook suggests that Samsung Electronics will enter the leading group in the High Bandwidth Memory (HBM) market starting with HBM4. Market expectations are growing that Samsung Electronics could secure the top position in HBM4 and the overall HBM market as early as next year.
This indicates that Samsung Electronics can build a technological moat in the HBM4 sector, securing a competitive advantage.
Current DRAM prices are projected to continue their upward trend until the first quarter of next year.
The sustained rise in DRAM prices is expected to directly impact the performance improvement of semiconductor companies, driving stock price appreciation.
Whether Samsung Electronics' foundry business unit turns from deficit to surplus is emerging as a crucial variable for future performance. Furthermore, even as the global smartphone market faces an overall slump, with Chinese manufacturers seeing a 20-30% decline in sales, Samsung Electronics' smartphone sales remain robust, which is a positive sign.
These factors are expected to contribute to Samsung Electronics' performance improvement.
As US hyperscaler companies issue large-scale bonds to fund AI investments, US Treasury yields have been rising. Concerns have been raised that these rising Treasury yields could impact hyperscalers' AI investment plans, potentially delaying some investments.
If interest rates continue to rise, companies' capital raising costs will increase, potentially burdening the overall investment environment.
Analysis suggests that a strong Korean won could negatively impact the operating profits of domestic export companies, particularly global enterprises like Samsung Electronics, potentially reducing them by approximately 7-8%. However, despite this exchange rate variable, the essence of tech companies lies in their technology, and it is argued that new technology development can offset exchange rate effects and drive stock price increases.
In other words, if technological innovation is accompanied, stock prices can remain strong even with a won/dollar exchange rate in the 1,000-won range.
Analysis indicates that Samsung Electronics' current stock price has a very attractive valuation (stock price relative to corporate value) at four times its value. This, coupled with improvements in areas where it previously lagged behind competitors, is attracting investor attention.
A analogy was presented: just as a student who moved from 10th to 3rd place receives more attention than one who always ranked 1st, it is now time for Samsung Electronics' improving performance to capture market attention.
The overall recovery across business divisions and strengthening technological leadership are further enhancing Samsung Electronics' valuation appeal.
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