Samsung Electronics and SK hynix shares have kept swinging in tandem with Nvidia's results.
When the data center growth rate slowed over the past year, the two stocks fell or were mixed no matter how strong Nvidia's overall results were, but as the third-quarter data center growth rate rebounded this time, they rallied together for the first time in a year.
On the 19th (local time), Nvidia released its third-quarter results after the New York market closed. Revenue rose 62% from a year earlier to $57.01 billion (about 83.4 trillion won), and earnings per share (EPS) came in at $1.30, both beating market expectations.
Fourth-quarter guidance was set at 95 trillion won. Immediately after the announcement, the stock jumped more than 5% in Nasdaq after-hours trading.
The domestic stock market also reacted immediately. On the 20th, Samsung Electronics rose 4.25% (4,100 won) to 100,600 won, and SK hynix, after gaining more than 5% intraday, closed up 1.6% (9,000 won) at 571,000 won.
This is the first time this year that Samsung and SK hynix both rose the day after Nvidia's earnings. Over the past year (on Feb. 27, May 27, and Aug. 28), the day after earnings, they mostly fell or were mixed. No matter how big a surprise Nvidia posted, Korea's leading chip stocks failed to gain traction.
Specifically, on Feb. 27, the day after the 2024 fourth-quarter earnings release, Samsung Electronics fell 0.53% to 56,300 won, and SK hynix closed down 1.87% at 199,200 won.
On May 27, the day after the first-quarter earnings release, Samsung Electronics fell 1.46% to 53,900 won, and SK hynix ended down 0.25% at 202,500 won.
On Aug. 28, the day after the second-quarter earnings release, Samsung Electronics slipped 1.42% to 69,600 won, while SK hynix rose 3.27% to 268,500 won, showing a mixed performance.
The real reason Korea's chip stocks did not move, no matter how strong Nvidia's results were, was the slowdown in data center growth. Samsung Electronics and SK hynix are key partners supplying HBM used in Nvidia's data center GPUs.
In the market, concerns about overvaluation persisted, with some saying, "Nvidia's growth is acknowledged, but it's already fully priced in," and when even data center growth faltered, investors responded coolly despite the earnings surprises.
In the 2024 fourth quarter, Nvidia's data center revenue was $36.5 billion (about 54 trillion won), up 93% from a year earlier and 16% from the previous quarter. In the first quarter of this year, it recorded $39.1 billion (about 57 trillion won), up 73% year over year and 10% quarter over quarter. In the second quarter of this year, it recorded $41.1 billion (about 60 trillion won), up 56% year over year and 5% quarter over quarter.
By contrast, the third quarter was different. Data center revenue surged 66% year over year and 25% quarter over quarter, with growth clearly rebounding. CEO Jensen Huang emphasized, "Blackwell shipments are soaring, and cloud GPUs are sold out." As AI demand was reaffirmed, the bubble worries that had lingered receded, and Samsung Electronics and SK hynix finally rallied together.
Kim Dong-Won, head of research at KB Securities, said, "As hyperscalers have recently issued bonds one after another, AI bubble concerns grew and semiconductor stocks underwent a correction, leaving share prices quite suppressed," adding, "In this situation, third-quarter results showed data center revenue coming in stronger than expected and confirmed that the AI ecosystem is rapidly spreading across industries, which worked positively for domestic chip stocks."
Park Seung-Jin, an analyst at Hana Securities, said, "HBM, the core product of Samsung and SK hynix, is an essential component for Nvidia's data centers," adding, "The solid data center demand outlook that Nvidia once again confirmed naturally translated into expectations for expanding HBM demand, and that optimism has driven the recent rise in domestic chip stocks."