As the "artificial intelligence (AI) bubble" debate resurfaced, shares of major U.S. big tech corporations fell, but domestic investors appeared to be continuing to buy. They seem to view it as a temporary correction.
According to the Korea Securities Depository (KSD) on the 7th, four of the top five U.S. stocks by net purchases settled by domestic investors over the past week (Oct. 29–Nov. 4) were AI-related big tech corporations.
The stock most heavily bought on a net basis was Meta Platforms, Facebook's parent company, with net purchases of $532.57 million (about 770.9 billion won). In second place was AI bellwether Nvidia, with investors net buying $318.23 million (about 460.5 billion won).
The exchange-traded fund (ETF) "Direxion Daily Meta Bull 2x Shares (METU)," which tracks twice the daily price gain of Meta Platforms, ranked third with net purchases of $226.41 million (about 327.6 billion won), while Alphabet, Google's parent company, ranked fourth with $107.44 million (about 155.5 billion won) in net purchases.
AI big tech corporations have seen their share prices trend lower recently as concerns mounted over large-scale investments funded through aggressive capital raising. Over the past week, Meta (-16.54%), Nvidia (-4.03%), and METU (-31.75%) all fell. The tech-heavy Nasdaq 100 index dropped 2.21% over the same period. Only Alphabet rose 1.08%.
Korean retail investors trading U.S. stocks are continuing to buy the dip, viewing the pullback as an opportunity given that the AI industry is only just getting started.
Park Sang-hyun, a researcher at iM Securities, also said, "There is no need to worry right now about the risks tied to large-scale AI investment, profitability, or potential overinvestment," adding, "The AI cycle is entering a full-fledged mass-adoption phase, and the United States and China, as well as other major countries, are in an environment where they cannot help but competitively pursue AI investment for a considerable period."
However, many say the market is likely to enter a phase of separating the wheat from the chaff. A domestic asset management firm chief said, "The AI industry will ultimately split between corporations that succeed in commercialization and those that do not," adding, "Just because it's big tech doesn't mean it's the time to blindly 'buy the dip.'"