Shin Eol

SK hynix has even stronger earnings momentum than Samsung, with analyst target prices surging from 3 million to 3.8-3.9 million KRW within a month. Its position in high-bandwidth memory (HBM) and long-term contracts gives exceptional earnings visibility, still trading at low multiples.

Samsung Electronics is deeply undervalued at around 7x forward PE, with massive earnings visibility from long-term supply contracts in AI memory. The company's earnings alone will exceed the entire Korean corporate profit of last year, and target prices are being raised above 500,000 KRW.

Domestic KOSPI stocks should be overweighted because the AI-driven earnings cycle (especially Samsung and SK hynix) is strong and sustained, while the geopolitical risk premium is already priced in. The Korean market has outperformed global peers and earnings visibility supports further upside.

AI is not a repeat of the dot-com bubble because AI is already delivering visible productivity gains and value creation while US penetration is only around 10% and global penetration is still low. Valuation concerns will persist, but a valuation-triggered bubble collapse is a lower-probability scenario, which supports continued AI-driven semiconductor demand.

After Jackson Hole the market prices roughly 60% odds of a September Fed rate hike and at least one hike within the year; 10-year and 30-year Treasury yields have already moved up and remain elevated. Fiscal deficits are making Treasury supply larger while big tech capex is creating heavy corporate bond supply, so investors demand higher term premium on long-dated Treasuries. Treasury buybacks merely roll debt rather than fix fundamentals, and the Fed retains QT optionality, so long-end rates are likely to stay elevated or biased upward.

Korea is part of the US-led semiconductor belt, and memory semiconductor companies are demonstrating massive profit creation and income transfer from AI investment. If growth remains faster than financing costs and the US AI value chain is validated, the positive view on Korean memory semiconductors can be maintained.

September is historically prone to volatility and weak/rangebound equity performance because of portfolio rebalancing after summer, an earnings season lull, and a history of Fed taper/rate decisions around September. With midterm elections still two months away, investors should stay conservative in September by securing liquidity and favoring dollar assets and short-term Treasuries over aggressive equity exposure.

After Jackson Hole the market prices roughly 60% odds of a September Fed rate hike and at least one hike within the year; 10-year and 30-year Treasury yields have already moved up and remain elevated. Fiscal deficits are making Treasury supply larger while big tech capex is creating heavy corporate bond supply, so investors demand higher term premium on long-dated Treasuries. Treasury buybacks merely roll debt rather than fix fundamentals, and the Fed retains QT optionality, so long-end rates are likely to stay elevated or biased upward.

Within US equities, a rotation is underway from high-growth tech (Nasdaq) into stable, large-cap value names. Funds are moving into the S&P 500 and Dow Jones as investors take profits on extended growth stocks and seek lower risk amid macro uncertainty. The speaker still wants US equity exposure but recommends a more conservative, large-cap value tilt.

Hyundai Motor has significant upside potential from its robotics and physical AI exposure via Boston Dynamics (future IPO), combined with strong financial strength and production capabilities. The company showed impressive confidence at CES and is positioned as a leader in physical AI, beyond just automotive.

Increase allocation to precious metals such as gold, as a safe-haven hedge while maintaining dollar liquidity. Technical rebound potential supports a relative overweight in gold.