Oracle data center investment setbacks trigger AI chip stocks to decline, South Korea's KOSPI slightly dips

Source: BlockMedia Original Title: [Market Opening] KOSPI, Weakening due to Oracle-related Bad News… Surpasses 4000 Level with Slight Decline Original Link:

Opening Market

On the 18th, the KOSPI index continued to hover below the 4000 level with a weak trend. The previous night, the US stock market declined across the board due to bad news from Oracle, with individual and institutional selling exerting downward pressure on the KOSPI index.

According to Korea Exchange data, at 9:30 AM, the benchmark KOSPI index was down 35.77 points(0.88%) from the previous trading day, closing at 4020.64. The KOSPI closed 66.81 points(1.65%) lower than the previous day(4056.41), opening at 3989.60.

Institutional net buying still insufficient to support the index… Samsung declines, SK Hynix rises

In the securities market, individuals and foreign investors sold 28.9 billion KRW and 15.2 billion KRW respectively. Conversely, institutions bought 41.4 billion KRW.

From an industry perspective, most sectors showed a decline. Chemicals, metals, electricity and gas, machinery, and construction all fell by over 2%. Securities, manufacturing, and financial stocks also weakened by over 1%.

The top 10 market cap stocks showed mixed movements. SK Hynix(+1.09%) and Samsung Biologics(+1.71%) rose, while Samsung Electronics(-0.65%), LG Energy Solution(-6.74%), Hyundai Motor(-1.22%), Doosan Energy(-1.72%) declined.

Oracle investment negotiations break down… AI bubble talk resurfaces

The night before, news broke that Oracle’s data center investment negotiations had collapsed, raising concerns about the profitability of AI(AI). Technology stocks declined sharply. The Dow Jones Industrial Average fell 0.47%, the S&P 500 dropped 1.16%, and the Nasdaq declined 1.81%.

Reports indicated that a key investor withdrew from Oracle’s approximately $10 billion data center project in Michigan, causing a sharp decline in investor confidence.

A securities analyst stated, “Oracle’s expansion of AI infrastructure investments has led to increased debt and higher financing costs, reigniting doubts about AI investment profitability. Oracle’s stock price, seen as a barometer of the AI bubble, plummeted, triggering a wave of sell-offs in AI chip stocks like Nvidia and Broadcom.”

However, some comments suggest it is difficult to determine whether the overall AI industry investment momentum has been broken. The analyst added, “Amazon is reviewing its over $10 billion investment in OpenAI, and OpenAI is discussing using Amazon’s own AI chips, indicating that the AI investment tone remains intact. The market is entering a phase where it selectively favors companies capable of generating real profits, rather than focusing solely on the growth potential of the AI industry.”

Micron exceeds expectations… Limited impact from Oracle bad news

On the other hand, another variable on the day was Micron’s better-than-expected earnings. Micron’s revenue and EPS(EPS) both surpassed market expectations, and its outlook for the next quarter was significantly upgraded. As a result, its stock surged in after-hours trading.

The analyst commented, “Micron’s performance exemplifies how demand for AI chips is translating into actual results, which can help restore investor confidence that had been dampened by Oracle’s issues to some extent.”

A securities analyst added, “Today, the domestic stock market also benefited from Micron’s earnings beating expectations and the surge in after-hours stock prices, which limited the impact of Oracle’s bad news causing a sharp decline in the AI-centered Nasdaq.”

KOSDAQ briefly falls below 900… KRW/USD exchange rate at 1477.3 KRW

Meanwhile, the KOSDAQ index fell 3.78 points(0.41%) from the previous trading day, closing at 907.29. The index was down 11.77 points(1.29%) from the previous day(911.07), opening at 899.30. The index once widened its decline, briefly falling below 900.

In the KOSDAQ market, only individual investors net sold 32.5 billion KRW. Foreigners and institutions net bought 26.2 billion KRW and 8.8 billion KRW respectively.

By industry, financials, non-metals, pulp and paper, and electrical electronics all declined by over 1%.

Top market cap stocks on KOSDAQ showed mixed trends. ABL Bio(+1.32%), Rainbow Robotics(+1.34%), Koolonttissue Jin(+1.66%) trended upward, while EcoPro BYD(-4.58%), EcoPro(-3.19%), Peptron(-2.48%), HLB(-1.29%), and Alteo Gen(-0.12%) declined.

In the Seoul foreign exchange market, the KRW/USD exchange rate closed at 1479.8 KRW, down 2.5 KRW from the previous trading day’s close, opening at 1477.3 KRW.