High Interest Rates Becoming Fixed... AI Illusion Could Break – “Reason for NVIDIA CDS Surge” / Korean Stock Market’s Final Test of the Second Half Begins | Eugene Investment & Securities Managing Director Heo Jae-hwan

Summary

Heo Jae-hwan discusses the semiconductor peak debate, Nvidia's CDS surge and circular financing, AI reality versus hype, the headwind of rising Korean interest rates for the KOSPI, and why KOSDAQ revaluation faces hurdles. He remains cautious on near-term semiconductor and AI momentum but sees the broader AI cycle intact, while highlighting Korean financial conditions as a key drag on equity recovery.

• Semiconductor competition intensifying; earnings expectations need to be lowered even if not a peak.
• Nvidia CDS premium spike is a yellow warning, driven by high AI infrastructure costs, slowing near-term growth.
• AI reality lags stock price expectations, causing repeated boom-bust adjustments.
• Korean interest rate hikes create a yield differential headwind, slowing KOSPI's recovery to higher multiples.
• KOSDAQ revaluation unlikely due to lack of global champions and poor earnings quality.
• The second half of the year is a testing phase for Korean equities, with a potential revaluation if earnings stability is confirmed.