Very different from the first half Stronger sector rotation…What is the market's direction after NVIDIA's earnings? | Park Byeong-chang, MP Partners CEO

Summary

Park Byeong-chang discusses the market implications of Nvidia's strong earnings, noting that while the Korean market remains range-bound with capped upside and limited downside, specific sectors are showing strong rotation. He highlights the structural growth in semiconductor equipment due to HBM silicon consumption and power infrastructure driven by AI data centers. Additionally, he warns about corporate governance risks in Korea using the SK Innovation/SKIET merger as an example, while pointing out that holding companies are benefiting from Value-up reforms.

• Nvidia's earnings beat expectations, confirming sustained data center CAPEX, with future growth expected from Sovereign AI.
• The KOSPI is currently in a range-bound state, making aggressive directional bets less effective than focusing on sector rotation.
• Semiconductor equipment stocks are favored due to increased silicon wafer consumption required for HBM3 production.
• Power infrastructure stocks like Doosan Enerbility and LS Electric are seeing massive demand from AI data center expansion.
• The SK Innovation and SKIET merger highlights the ongoing dangers of poor corporate governance and split-offs in the Korean market.
• Korean holding companies like GS are hitting new highs, benefiting from the government's Value-up and governance reform initiatives.
• Market interest is beginning to shift from AI hardware infrastructure to AI software and service providers.