Market's Overinterpretation of AI Deceleration Theories

Specifically, while AI data center and hardware sector stocks declined, software companies (security, data management, etc.) saw sharp increases.

Some hedge funds also made short-term position adjustments, further increasing market volatility. This interpretation is seen as based on short-term investment sentiment rather than the inherent meaning of AI technology development.

The U.S. 10-year Treasury yield surpassed 5.02%, putting significant pressure on the stock market. A high-interest-rate environment increases the discount rate for growth stocks, especially in the AI and bio sectors, acting as a factor for stock price decline.

However, debate continues on whether fundamental improvements can offset this interest rate hike pressure. Some argue that corporate earnings improvements can sufficiently defend against interest rate impacts.

Panelist Lee Kwon-hee assessed that the U.S. market is performing well despite rising interest rates. This suggests that the robustness of corporate fundamentals is playing a role to some extent.

Ultimately, it is crucial to find a balance between the short-term impact of rising interest rates and companies' long-term growth potential.

Such short-term quarterly earnings forecast adjustments tend to hold little significance for the market.

Rather, fundamental changes in outlooks for the fourth quarter and next year are more important. The analysis suggests focusing on when and why earnings were adjusted, rather than just the target price adjustment itself.

It is necessary to review the semiconductor stock price performance of the U.S. stock market compared to its low point on July 29/30.

SK Hynix stock has risen 39% from its low, and semiconductor stocks show an outperformance compared to software stocks. This indicates a divergence in fundamentals despite temporary macroeconomic fluctuations.

Panelist Kim Jang-yeol emphasized the realistic upward trend of semiconductor stocks since the end of July, stating that from a long-term perspective, the bottom has already passed. This view suggests that despite short-term market anxiety, the recovery of the semiconductor industry is likely to continue.

If this process is successfully completed, the company could become Samsung Electronics' main actuator supplier.

It is also known that this company is in contact with the U.S. robot company 'Fig AI'.

Expectations are also rising that Samsung Electronics will unveil a humanoid at CES 2025 next year, further highlighting the importance of robot-related collaborations.

However, counterarguments to this perspective are also raised.

Some analysts interpret it as 'excuse-making' by companies to create justification in anticipation of potential business failure. That is, it is an intention to manage risks under the pretext of ethical issues in AI technology development.

At the same time, there is also an analysis that infrastructure investment will continue. The view is that companies will not stop AI-related investments to confirm productivity gains. The fact that IPOs are proceeding as expected by the market, contrary to initial expectations, is presented as evidence for this argument.

He mentioned a call with Nvidia CEO Jensen Huang, stating that he agreed with this opinion.

This political interpretation offers a perspective that views discussions on AI technology development not merely as technical or ethical issues, but within the context of international relations and hegemonic competition.

This is a significant increase from the current unit price.

However, the accuracy of this report has not yet been officially confirmed. If true, it would indicate a strengthening of supplier dominance in the memory semiconductor market.

The key to the Clarity Act settlement is securing the support of six Democratic senators. Analysis suggests that the possibility of a bill settlement is rising as former President Trump recently approved regulations for high-ranking officials related to cryptocurrencies.

However, even if the bill passes, it is expected to take more than six months for actual implementation due to procedures such as transfer to the House of Representatives. This bill could provide regulatory clarity for the virtual asset market, positively impacting investor sentiment.

Therefore, it is necessary to closely monitor the final passage of the bill and the process until its actual implementation.

If this trend continues, market uncertainty is expected to dissipate after the FOMC and BOJ meetings, allowing for an upward movement to 2,700-2,730 next week.

The AI semiconductor industry conditions and bond yield trends are expected to be more significant variables than exchange rate fluctuations. Specifically, if U.S. interest rates fall below 4.9%, foreign investor sentiment is expected to improve, positively impacting the domestic stock market.

Analysis suggests that despite an uplift in corporate earnings forecasts, stock prices are excessively suppressed.

Panelist Lee Kyung-min emphasizes that in such a situation, it should be seen as a time to rebuild portfolios rather than sell. He suggests that instead of leaving the current position, it's time to consider how to structure the portfolio and what picture to draw in the next cycle.

The leading economic index rebounded in July, somewhat alleviating market concerns. Many investors were gripped by fear that the KOSPI would lead a decline in the leading economic index, but this fear is now subsiding.

Panelist Lee Kyung-min interprets the non-decline and rise of the leading economic index as an indication that valuation normalization can occur. With corporate fundamentals remaining solid, there is an expectation that excessively undervalued stocks will return to their rightful place.

In short, the outlook is that as long as earnings do not decline, the current stock price drop is a temporary phenomenon and will eventually converge to corporate value.

Even if the development speed of frontier models is reduced from 45 degrees to 37 degrees, this is analyzed to be unrelated to the growth of inferential AI models. The demand for inferential AI computing resources continues to increase.

Panelist Kim Jang-yeol emphasizes that the market's core focus is on the increasing demand for inferential AI computing resources rather than the amount of training. The infrastructure shortage problem remains severe, and semiconductor supply is still tight.

Therefore, the dominant view is that the impact of AI development deceleration theories on semiconductor demand will be limited. The interpretation is that actual AI utilization demand will not decrease but continue to grow.

The possibility of short-term risks in AI-related capital expenditure (Capex) timing is raised. This means that market uncertainty could increase depending on whether big tech companies maintain their guidance.

Panelist Kim Jang-yeol stated that whether these risks actually materialize must wait until earnings announcements. Confirmation of earnings announcements from major semiconductor companies like Micron and the speed of LTA (long-term supply agreements) is needed.

Analysis suggests that big tech companies are using AI safety and ethical issues as a pretext to preemptively establish regulations, thereby blocking competitors' market entry. This is interpreted as a strategy to maintain their hegemony.

They aim to sustain competitive advantage through AI's recursive self-improvement capabilities. This can also be used as a regulatory capture strategy to prevent latecomers like China from entering the AI market.

Therefore, discussions on AI regulation are not simply about the pace of technology development, but also a crucial factor in understanding the power competition structure among big tech companies within the AI industry.

Although smaller in scale than nuclear or LNG power plants, they offer the advantage of flexible expansion as data centers grow. This contributes to securing rapid power supply.

Technologically, PAFC (Phosphoric Acid Fuel Cells) are considered proven technology, and SOFC (Solid Oxide Fuel Cells) boast high efficiency, with each technology having its pros and cons.

Statistically, the Korean stock market has a characteristic where the immediate past leading stock rarely becomes a leading stock again. This has already been revealed through past data.

The current market is interpreted as a period of accumulation, concentrating energy before new leading stocks emerge. Investors should pay attention to the potential for new sectors to lead.

Therefore, a perspective is presented that efforts are needed to discover new sectors or stocks with new growth engines, beyond the existing investment strategy centered on large-cap semiconductor stocks. The principle of leading stock rotation is understood as a unique characteristic of the Korean stock market.

There was a phenomenon where earnings showed a temporary surge each quarter, but the stock price continuously declined.

This shows that analysts' target prices are merely calculated figures and do not reflect market sentiment and supply-demand fluctuations. Despite strong earnings, the stock price halved by 2019, experiencing a significant period of adjustment.

Therefore, it provides a lesson that it is difficult to predict the direction of stock prices based solely on earnings forecasts. It is emphasized that various market variables must be considered comprehensively.

This refers to a period when major market uncertainties, such as interest rate policies, are resolved.

This term, used by past investment masters, describes a phenomenon that occurs when uncertainties disappear and the market begins to move in a specific direction.

It is argued that the current market situation needs to be interpreted from the perspective of 'fait accompli.' The view is that once key variables become clear, the market's direction will also become distinct.

Analysis suggests that such expectations are still close to 'false hope.'

The reason given is that the macroeconomic environment continues to suppress index increases. Global interest rates, exchange rates, and other macroeconomic variables still add to uncertainty.

Therefore, advice is given that a stock-specific strategy, especially centered on power and nuclear power-related stocks, would be more effective than a general index rebound.

The current market is characterized by difficulty for investors to make profits, no matter how much they try and study. This situation is increasing the fatigue of individual investors participating in the market.

Panelist Hwang Yu-hyun emphasizes market fatigue, citing a sharp decrease in information sharing among individual investors. He suggests that investors need the right to take a break without being engrossed in the market.

In other words, rather than continuing excessive investments, taking a temporary break and observing market trends can be a wise strategy.

Rather, it is highly likely that companies preparing for IPOs will use this as a means of self-regulation to avoid potential legal liabilities.

Panelist Lee Ji-hwan interprets these arguments as also harboring the purpose of checking open-source-based competitors. It is an intention for early movers to make it difficult for latecomers to enter the market through regulation.

In conclusion, the AI deceleration theory is assessed not merely as an issue of the pace of technology development, but as a result reflecting various interests and competitive structures occurring within the AI industry.

What used to occur once or twice a year is now happening almost every month, increasing investor fatigue.

While the overall index may show limited movement, there is always a possibility of sharp fluctuations in specific sectors or stocks. This analysis suggests a similar level of option market fatigue to what was seen in the Hong Kong market in the past.

Therefore, investors need to understand the characteristic movements of the market around option expiry dates and pay closer attention to risk management accordingly.