[Good Morning Stock Market] South Korea Seen Opening Lower Amid Ongoing AI Profitability Concerns

Most U.S. Stocks Close Lower as AI Profitability Debate Continues
South Korean Market Also Expected to Open Lower Amid AI Stock Correction
"Investors Should Consider Low-PBR Stocks, Including Holding Companies and Industrials"

With concerns over the profitability of artificial intelligence (AI) continuing, most U.S. stocks closed lower, and the South Korean stock market is also expected to open down in their wake.

Stock market indices are displayed in the dealing room at Hana Bank's headquarters in Jung-gu, Seoul, on Nov. 2. As of 9:03 a.m., the KOSPI was down 86.58 points, or 1.51%, from the previous trading day, at 5,644.16. After opening 1.62% lower, the index widened its losses to as much as 1.99% in early trading. Nov. 2, 2026. Kim Hyunmin, staff reporter

On November 2 (local time), the S&P 500 closed at 7,541.40, down 0.51% from the previous trading day. The tech-heavy Nasdaq Composite fell 1.07% to 25,164.32, the Philadelphia Semiconductor Index dropped 3.37% to 10,328.33, and the Dow Jones Industrial Average rose 0.41% to close at 51,983.98.

Concerns over AI profitability continue to surface. On this day, news that Oracle would issue $20 billion in stocks and bonds to fund AI infrastructure investment, as well as $890 billion in infrastructure commitments revealed in Anthropic's amended initial public offering (IPO) filing, further fueled the controversy. The high acquisition price that came into focus after semiconductor company Marvell agreed to acquire optical-component maker Lumentum Holdings for 154 trillion won also appears to have weighed on the market.

As the debate continues, AI companies are expected to face ongoing pressure to prove their profitability each earnings season. However, some factors could ease concerns, including a 7% plunge in U.S. West Texas Intermediate (WTI) crude oil prices as the United States and Iran foster an atmosphere of diplomatic negotiations, and the U.S. 10-year Treasury yield falling below 5%.

"Because credit default swap (CDS) premiums and other costs are added to AI companies' borrowing rates, their stocks are expected to remain volatile as investors assess whether this will actually lead to lower borrowing costs," said Han Ji-young, a researcher at Kiwoom Securities. "However, given that much of the price correction in AI stocks has already taken place since last month and that current macroeconomic conditions are deteriorating less than before, it would be appropriate to assume that any further correction will primarily take the form of a time correction rather than a price correction."

The South Korean stock market is expected to open lower amid the impact of the correction in U.S. AI stocks. After the U.S. market closed, Palantir reported commercial revenue of $980 million, exceeding market expectations of $940 million, which was positive. However, Palantir shares were down about 3% in after-hours trading, and are expected to be a source of volatility.

Brokerages stressed that investors should consider low price-to-book ratio (PBR) stocks amid this volatile market. On the previous day, the Korea Exchange released a list of 151 low-PBR companies in sectors including holding companies, construction, chemicals, distribution, food and beverages, and steel.

"This policy is intended to encourage companies that have been undervalued for a long time to voluntarily improve their corporate value," the researcher said. "Companies on the low-PBR list are expected to have greater incentives to flesh out plans to enhance corporate value, such as increasing dividends and share buybacks, by the next publication date on May 4, 2027."

"As the stock market recovers, investors could consider adding not only leading sectors such as AI infrastructure stocks but also holding companies and industrials with significant potential to expand shareholder returns," the researcher added.

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