Nvidia's Strong Earnings... Biggest Winners Are 'Semiconductors and Power Equipment'

Battery Stocks Also Positive on U.S. Power Emergency

On the 28th, with the KOSPI starting lower, employees are seen working in the dealing room of Hana Bank in Jung-gu, Seoul. Photo by Yonhap News

Market expectations for a renewed rally in global semiconductor stocks are rising, as Nvidia's market capitalization surged by 61.1 trillion won in a single day following its strong earnings announcement. In addition to robust demand for artificial intelligence (AI) data centers shown in Nvidia's results, the U.S. has further tightened regulations on Chinese electric power equipment. On August 28, this led to significant gains among domestic electrical equipment and battery stocks.

Semiconductor and Power Equipment Expectations Rise on Positive Nvidia Earnings

As of 10 a.m. on August 28, the KOSPI was trading at 6,848.06, down 0.93% from the previous day’s close. At the same time, the KOSDAQ was also down by 0.39% at 834.39.

Despite the overnight rally on the New York Stock Exchange spurred by Nvidia’s positive earnings, the KOSPI showed a slight decline due to profit-taking after the gains were priced in the previous day. On August 27 (local time), the Dow Jones Industrial Average rose 0.20% and the Standard & Poor’s (S&P) 500 gained 0.72%, while the Nasdaq Composite Index jumped 1.57%.

Nvidia’s share price soared 8.74% after the company reported results that beat market expectations along with strong forward guidance. This drove the company’s market capitalization up by $442 billion (about 61.1 trillion won) in a single day, marking the second-largest one-day increase for an individual stock in history. The all-time record was set by Microsoft (MS) last month at about $450 billion.

Nvidia announced that second-quarter sales increased by 106% year-on-year to $96.22 billion. This exceeded the market consensus of $92.17 billion by about $4 billion, marking record sales for the thirteenth consecutive quarter. As Nvidia surged, the Philadelphia Semiconductor Index climbed 2.33%. However, memory semiconductor stocks such as Micron (-0.32%) and SanDisk (-0.96%) declined, as decreases in hardware sales associated with rising memory prices came to the fore.

Suh Sangyeong, Managing Director at Mirae Asset Securities, said, "The U.S. market climbed, led by sharp rallies in Nvidia and Salesforce (+22.58%) after their earnings announcements. However, the entire AI supply chain did not rise together, and concerns over hardware company profitability due to rising memory prices, the prospect of additional semiconductor tariffs, and persistently high U.S. Treasury yields remained."

As of 10:01 a.m. on August 28, Samsung Electronics (-1.32%) and SK hynix (-1.04%) were both down in the domestic market. This was attributed to profit-taking after gains the previous day, as well as ongoing concerns about higher memory prices raised in the U.S.

Battery Stocks Also Positive on U.S. Power Emergency

However, expectations for increased demand for AI semiconductors, as projected by Nvidia, and the U.S. government’s strengthened restrictions on Chinese power equipment have led to notable strength in power equipment and battery stocks.

According to the White House, President Trump signed an executive order on August 26 proclaiming a 'national emergency to secure the bulk-power system' in the United States. While no country was specifically mentioned, the U.S. has long tightened regulations on Chinese power equipment, citing risks to the security and cybersecurity of its power grid. Concerns include foreign-made power equipment containing so-called 'digital backdoors' that could be used to attack or disrupt the U.S. grid.

The movement to phase out Chinese power equipment in the U.S. is a positive development for domestic electric power and battery companies. As demand for power equipment to supply data centers in the rapidly developing AI industry is surging—and with U.S. restrictions on imports from China—Korean companies are strengthening their position in the market.

This optimism is already being reflected in stock prices. So far this month, major electric power equipment stocks such as Iljin Electric (up 42.2%), Hyosung Heavy Industries (up 27.1%), and HD Hyundai Electric (up 19.0%) have soared, and battery makers like Samsung SDI (up 44.9%) and LG Energy Solution (up 13.1%) have also been in the spotlight.

Minjae Lee, an analyst at NH Investment & Securities, commented, "Last year, there were growing concerns in the U.S. over the installation of undisclosed communication devices in some Chinese solar inverters, which could allow for remote control. The latest U.S. measures will have a positive impact on Korean companies related to the power sector," he explained.

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