There is an outlook that the KOSPI is likely to continue a "W-shaped" box-range market until late July, when the direction of global big tech's artificial intelligence (AI) investment becomes clear. Samsung Electronics reported results that beat market expectations, but analysts said it will be difficult to find a clear direction until the persistence of the AI investment cycle is confirmed, given that market expectations have risen.
Shinhan Investment said in a report on the 8th that the KOSPI is likely to fluctuate within a box range for the time being. It set the lower bound at 7,550–7,650 points and the upper bound at 8,300–8,400 points.
Noh Dong-gil, a research fellow at Shinhan Investment, said, "Samsung Electronics posted operating profit of 8.94 trillion won in the second quarter, beating market expectations, yet the share price failed to gain momentum right after the earnings release," and noted, "The shift in the market's focus from current results to next quarter's results explains the recent volatility."
He added, "As the market has begun to question the period after 2027, strong second-quarter results alone are not enough to drive a rebound," and said, "Additional information is needed to confirm upward revisions to earnings estimates that meet the heightened expectations for third-quarter results and whether AI capital expenditures (CAPEX) will continue."
Shinhan Investment assessed that, because there is still no clear guidance on whether global big tech will continue to expand AI investment and whether memory semiconductor supply-demand and profitability will be maintained, the market is reflecting this "information gap" through price corrections. Accordingly, it projected that a box-range market is likely to continue until major hyperscalers release their earnings and AI CAPEX guidance scheduled from late July to early August.
It also noted that while semiconductor stocks are undergoing a correction, earnings outlooks are actually being revised upward. According to Shinhan Investment, Samsung Electronics' operating profit estimates for 2027 and 2028 have risen 15% and 11%, respectively, over the past four weeks, and SK hynix's 2027–2028 operating profit outlook is also trending higher.
Valuations also reflect the market's concerns. The KOSPI's 12-month forward price-earnings ratio (PER) is around 7 times, the lowest level since 2020, while the price-book ratio (PBR) remains relatively high at about 1.7 times. Based on current results, shares are undervalued, but this means the market places greater weight on how long the semiconductor boom will last.
Shinhan Investment advised that, for the time being, a strategy that responds to volatility is more effective than aggressively increasing exposure. It said investors should reduce leverage while maintaining a spot-centered core portfolio and check whether the decline in existing leading stocks is subsiding and whether market-wide breadth is improving. It also added that it is preferable to focus on sectors with upward earnings estimate revisions rather than on stocks that have simply fallen too far.