[Weekend Money] Next Week’s Investment Strategy: Focus on Nvidia’s Earnings

NH Investment & Securities' Weekly Investment Strategy Preview
"KOSPI Above 7,000: Time to Focus on Non-Semiconductor Sectors"

There is a projection that the KOSPI could rise as high as the 7,500 level next week, spurred by Nvidia's earnings and the upcoming Jackson Hole meeting. Experts suggest that if the KOSPI settles above the 7,000 mark, investors should also consider non-semiconductor sectors where artificial intelligence (AI) monetization is being confirmed through earnings.

According to NH Investment & Securities' "Weekly Investment Strategy Preview" released on the 22nd, the expected range for the KOSPI next week (August 24–28) is 6,400 to 7,500. Positive drivers include Nvidia’s earnings and reduced interest rate volatility, while profit-taking sales pressure is cited as a potential downside factor. The previous day, the KOSPI closed at 6,912.95, failing to surpass the 7,000 threshold.

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The most significant variable is Nvidia's earnings announcement scheduled for the 27th. Jeonghwan Na, a researcher at NH Investment & Securities, emphasized that "the key issue is not only whether Nvidia will exceed earnings expectations, but also whether it can maintain a high gross margin."

As Nvidia has entered the early transition phase from Blackwell to the next-generation Rubin, there is a possibility that initial yield stabilization of the new product could lead to increased costs, which may dilute margins. Even if sales continue to grow, a damaged gross margin could raise concerns about the profitability of the entire AI investment cycle.

Nvidia’s comments on supply constraints for high-bandwidth memory (HBM) and advanced packaging are also considered key points to watch. The perception that supply bottlenecks persist may further strengthen Korean memory makers’ bargaining power on prices.

The keynote speech by Federal Reserve (Fed) Chairman Kevin Warsh at the Jackson Hole meeting—scheduled for August 27–29 U.S. local time—is drawing attention. NH Investment & Securities expects that, given the Fed’s recent shift toward reduced forward guidance, direct comments on the future path of interest rates will likely be limited. Instead, discussions are expected to focus more on the policy framework itself than on detailed monetary policy direction.

The firm also analyzed that, especially amid the recent rise in U.S. long-term yields, it is critical how the Fed interprets the U.S. Treasury’s decision to double the buyback limit for long-term Treasury bonds. Na explained, "If cooperation between fiscal and monetary policy is reaffirmed, it could stabilize long-term rate volatility and ease discount rate pressures on stock prices."

NH Investment & Securities assessed that many of the factors that have been constraining the KOSPI are being significantly resolved. This is supported by major shareholder return measures implemented by Samsung Electronics and SK hynix, as well as ongoing efforts by the U.S. Treasury to stabilize long-term rates. The KOSPI forward price-to-earnings ratio (PER) fell as low as 5.0 times at the end of July but has since rebounded to 5.8 times as stock prices have recovered faster than upward revisions to earnings forecasts.

Na added, "If Nvidia’s earnings next week confirm the continuation of the AI cycle and the Jackson Hole meeting leads to a calming of U.S. Treasury rate volatility, normalization of valuations is expected to continue. If the KOSPI settles in the 7,000 range, a broader approach to include non-semiconductor sectors where AI monetization is confirmed through earnings will be effective."

Sectors of interest include semiconductors, power equipment, energy storage systems (ESS), securities, and pharmaceuticals. The specific stocks mentioned were Samsung Electronics, LS ELECTRIC, LG Energy Solution, Samsung Securities, and Celltrion.

This content was produced with the assistance of AI translation services.