This week, because of the Lunar New Year holiday, the domestic stock market will open for only two days, on the 19th and 20th. There are no notable economic events or data releases scheduled, but in the United States, concerns that artificial intelligence (AI) will replace major industries and arguments about AI overinvestment are being raised repeatedly. The direction of debate over AI's role is expected to affect Korea's stock market as well.
Although the KOSPI index broke through the 5,500 level last week and continues its record rally, experts are maintaining a positive outlook. Cho Byung-hyun of Daol Investment & Securities said, "We still judge that the index is in an upward trend," adding, "Strategically, there is no reason to reduce the allocation to the semiconductor sector."
Last week, the KOSPI index topped 5,500 points to hit a record high. As semiconductor supply shortages persist, the view has gained traction that the profits of large semiconductor companies will surge for a considerable period. Samsung Electronics, Korea's leading semiconductor stock, exceeded 180,000 won, and SK hynix is also again eyeing 900,000 won.
On top of that, with most listed companies recently reporting solid results, expectations are growing that the domestic market will keep rising. Usually, ahead of a holiday when the market closes for several days, there is a wave of profit-taking, but on the last trading day before the break, on the 13th, the index fell only slightly.
The issue investors should watch most closely is the debate over the "AI threat" and an "AI bubble," which is affecting many industries.
While fears are growing that advanced AI technology can quickly replace the business models of existing industries, concerns are also mounting that the profitability of big tech, which is pouring massive capital into AI, could deteriorate. Seo Jung-hoon, Head of Team at Samsung Securities, analyzed, "The coexistence of the hard-to-reconcile AI threat and AI bubble controversies is proof that demand for AI platforms is already taking shape."
Kim Yu-mi, an economist at Kiwoom Securities, also said, "The market's focus, which had been on the AI investment cycle and growth expectations, is now shifting to concerns about industries that will benefit from AI and those that will be replaced," adding, "This means we have entered a realistic phase of assessing the potential restructuring of industries and profitability due to AI."
This means a selective approach is needed to industries and corporations that directly benefit during the infrastructure build-out, rather than optimism about AI overall.
While the debate over the growth of the AI industry continues, the outlook is that the market rally led by the semiconductor sector will persist. Yoo Myung-gan of Mirae Asset Securities said, "Semiconductors, industrials, financials, holding companies, and KOSDAQ sectors are expected to benefit from earnings growth and policy momentum," advising, "It is good to focus on stocks that meet the separate taxation threshold for dividends and are expected to see supply-demand improvement."
Meanwhile, before our market opens on the 19th, the U.S. Federal Reserve is set to release the minutes of the Federal Open Market Committee (FOMC) regular meeting held in January.
Jeong Hae-chang of Daishin Securities said, "Through the released minutes, we will be able to gauge how the Committee members view inflation and employment during the Fed's leadership transition," adding, "The market has already priced in much of the uncertainty amid the volatility that has continued since last week, so stock prices are likely to overcome concerns and continue to move based on fundamentals."