US tech stocks slide amid risk-asset retreat
Foreigners net-sell 1.3 trillion won on Kospi
Analysts say AI demand data due late October key to calming selloff
Samsung Electronics and SK hynix, which had been leading domestic market gains on expectations of improving earnings, were dragged down Thursday by mounting concerns over AI investment risk.
A combination of rising US inflation, higher borrowing costs for AI data center operators and growing doubts about their profitability fueled a sharp selloff in semiconductor stocks. Foreign investors net-sold more than 1 trillion won ($747 million) on the Kospi, sending Samsung Electronics down more than 7% and SK hynix more than 10%. The optimism that AI industry growth would translate into stronger earnings for chipmakers is now being put to the test.
According to Korea Exchange, Samsung Electronics was trading at 214,500 won, down 17,500 won (7.54%) from the previous session, as of 10 a.m. Thursday. SK hynix fell 149,000 won (10.50%) to 1.27 million won. Samsung Electronics preferred shares also dropped 7.60%, while SK Square tumbled 10.21%. The Kospi was down 410.08 points (6.82%) at 5,598.73 at the same time.
Foreign investors net-sold 1.28 trillion won on the Kospi during the same period. Institutional and retail investors net-bought 773.9 billion won and 388.3 billion won, respectively, but their purchases were not enough to offset the foreign selling pressure.
Some analysts say the recent correction should be seen less as a reaction to interest rate variables alone and more as investors preemptively trimming their exposure to risk assets ahead of key upcoming events. Yang Hyeong-mo, a researcher at DS Asset Management, said the market is in "a final phase of pain" and that once uncertainty clears, discounted earnings will be priced back in. He forecast that selling pressure will ease once business-to-business AI demand is confirmed in earnest between late October and November.
The weakness in US technology stocks on Wednesday had a direct impact on the domestic market Thursday. Overnight, Wall Street fell — led by tech stocks — as stronger-than-expected US inflation data compounded concerns about the borrowing burden facing AI infrastructure investors. The NASDAQ dropped 1.88%. Wariness over AI investment financing and profitability spread further after the corporate bonds of CoreWeave, an AI data center operator, fell below 80 percent of face value.
Kim Rok-ho, a researcher at Hana Securities, said the US consumer price index for September rose 3.7 percent year-on-year, exceeding market expectations. "Inflation pressure came in higher than anticipated, fueling concerns about further benchmark interest rate hikes," Kim said. "Profit-taking emerged mainly in AI-related technology stocks, dampening investor sentiment across the broader semiconductor sector."
kacew@heraldcorp.com
