In July, when concerns over an artificial intelligence (AI) circular financing bubble surfaced, the global market capitalization rankings swung sharply. Nvidia, which had been No. 1 by market cap, briefly ceded the top spot to Apple, and Samsung Electronics and SK hynix also fell in the rankings on worries about a semiconductor downcycle.
According to CompaniesMarketCap on the 4th, as of the previous day Samsung Electronics' market capitalization was $1.1 trillion (about 1,500 trillion won), ranking 13th globally. SK hynix's market cap was $778.5 billion (about 1,108 trillion won), slipping one notch to 19th.
Earlier, Samsung Electronics rode the semiconductor boom to climb to 10th in global market cap. On June 2, its intraday market cap topped $1.5 trillion (about 2,274 trillion won), overtaking Meta, the parent company of Facebook and Instagram.
However, as doubts grew in July about the durability of AI investment, Samsung Electronics' share price fell nearly 40% from its peak, and its global market-cap ranking slid to as low as 15th. It has since rebounded somewhat and is now hovering around 13th.
The shift in the market-cap landscape stems from mounting doubts about the semiconductor cycle. It is true that Samsung Electronics and SK hynix are posting record operating profits in the tens of trillions of won, but skepticism has arisen over whether today's high prices can be sustained as AI big tech corporations' cash capacity gets stretched. They are extending the boom cycle through long-term agreements (LTAs), but the market has also raised concerns that they may have to cut the average selling price (ASP).
In particular, controversy over "AI circular financing" centered on Nvidia has dampened investor sentiment. As doubts grow over whether a structure in which AI corporations boost their size by exchanging investments and sales among themselves is sustainable, caution has spread across the AI investment cycle. On top of that, credit default swap (CDS) premiums for global big tech have surged to record highs, and U.S.-Iran tensions have driven Government Bonds yields sharply higher, significantly increasing the capital-raising expense burden.
In fact, even Nvidia, which had held the global No. 1 market cap for 1 year and 1 month, saw its position wobble. On July 17, amid concern over AI valuations, it lost the intraday market-cap crown to Apple, which had invested relatively less in AI. Apple ranked No. 1 by closing price from the 27th to the 30th. However, after strong earnings from Microsoft and Amazon, doubts about AI eased, and Nvidia reclaimed the top spot.
Meanwhile, SpaceX started at eighth in global market cap after listing on the U.S. Nasdaq on the 12th of last month, but it is currently holding ninth as the share price has fallen 28% from the offer price ($135).