CoreWeave Soars, Nvidia Wobbles... Caution and Optimism Vie on KOSPI

Wall Street tech and semiconductor rally
After-hours plunge on reports of moves to oust Jensen Huang
Structural concerns persist over an "AI cycle slowdown"

New York stocks rebounded across the board on strong earnings from CoreWeave, an artificial intelligence (AI) cloud company, while South Korean stocks opened slightly higher and have since fluctuated around the break-even point. Caution over Nvidia's sharp decline in after-hours trading and the possibility of weakening data center demand is weighing on the market.

The domestic stock market is displayed on an electronic board in the dealing room at Hana Bank's headquarters in Jung-gu, Seoul, on the 12th. The KOSPI opened up 0.20% from the previous trading day at 5,385.94, while the KOSDAQ opened down 0.27% at 703.22. Photo by Kim Hyunmin.

On the 12th, the KOSPI opened at 5,385.94, up 0.20% from the previous trading day, and was trading at 5,393.63, up 0.34%, as of 9:50 a.m. At the same time, the KOSDAQ was trading at 698.61, down 0.92%.

Technology stocks led gains on Wall Street overnight. On the 11th (local time), the Dow Jones Industrial Average rose 0.49% from the previous session to close at 52,486.49 on the New York Stock Exchange (NYSE). The S&P 500 rose 1.31% to 7,619.38, while the Nasdaq Composite gained 1.60% to finish at 25,466.19.

In particular, CoreWeave, which had been at the center of concerns about an AI bubble, surged 24.71% after reporting an earnings surprise. The gains were supported by CEO Mike Intrator's dismissal of regulatory concerns and announcement that he would put share sales on hold, as well as strong demand forecasts for Anthropic ahead of its initial public offering (IPO).

AI and semiconductor stocks also soared. Micron gained 11.89%, Sandisk rose 13.69%, and SK hynix ADRs climbed 9.71%. Nvidia, which had plunged amid a scandal involving CEO Jensen Huang, rose 2.92% during regular trading. However, its shares fell around 8% in after-hours trading following reports that the board was preparing to remove Huang. There are concerns that uncertainty over Huang's future at the company could disrupt its aggressive investment strategy, new product development, and relationships with major customers.

There are also strong warnings about excessive investment in AI. According to The Wall Street Journal (WSJ), London-based economic research firm Capital Economics recently warned that up to 80% of the increase in global exports has been concentrated in AI-related products. It said that if the data center investment cycle slows, countries with weak domestic consumption, such as South Korea and China, could be hit hard. The firm warned that the collapse in global trade caused by a sharp drop in IT demand during the dot-com bubble burst could happen again.

"The main factors behind the recent sharp declines in AI and semiconductor stocks were concerns that regulations could delay AI data center construction and credit risks tied to massive debt and financing costs. Hedge funds' efforts to reduce leverage then triggered the plunge in related stocks," said Seo Sang-young, a researcher at Mirae Asset Securities. "We believe concerns about the spread of credit risk have eased as CoreWeave restored confidence in the profitability of AI infrastructure and its ability to repay debt."

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