[Featured Stock] Isu Petas Benefits from MS and OpenAI's 130 Trillion Investment... Signal of the 2nd AI Cycle

Isu Petasys' stock price is on the rise. Securities firms' analyses suggest that the investment attractiveness has increased as the company is on the verge of entering the network-based second artificial intelligence (AI) cycle, which appears to be influencing the stock price. Meritz Securities estimated that Isu Petasys will achieve operating profits of 162.7 billion KRW and 189.1 billion KRW in 2025 and 2026, respectively.

As of 11:07 AM on the 11th, Isu Petasys is trading at 42,200 KRW, up 5.5%.

Researcher Yang Seung-su of Meritz Securities explained, "For AI network configuration, an increase in network equipment demand is essential alongside the increase in GPU installation," adding, "This is because networking technology to connect GPUs is required to improve the performance of GPUs, which are the core of AI infrastructure."

He continued, "AI networks require ultra-high-speed and high-bandwidth networking technology compared to existing networks," and added, "Big tech companies' AI infrastructure construction is expected to focus on Ethernet-based network investments."

Furthermore, he stated, "Many big tech companies are pursuing 'de-NVIDIA-ization,' and Ethernet has made significant performance advancements," emphasizing, "Notably, Microsoft and OpenAI recently announced AI data center investments and revealed Ethernet-based network construction."

He analyzed, "Recently, Broadcom mentioned in its earnings report that AI network infrastructure built with Ethernet secured about a 10% performance advantage over InfiniBand," and added, "Along with Ethernet-based AI infrastructure network construction, an expansion of Ethernet switches over 800G is expected."

Researcher Yang said, "From Isu Petasys' perspective, this means simultaneous improvements in performance through product mix enhancement and capacity erosion due to multilayering," and noted, "Arista Networks, a leader in the Ethernet market, is currently responding to samples of 40-layer or more high-value-added substrates for 800G network including 800G switches."

OpenAI, the creator of ChatGPT, recently decided to invest 100 billion USD (approximately 130 trillion KRW) with Microsoft to build an AI supercomputer. They are undertaking a project to build a data center composed of supercomputers equipped with special AI semiconductors to operate various AI models of OpenAI. To reduce dependence on NVIDIA, they prefer to use 'Ethernet' rather than 'InfiniBand' for network technology.

Researcher Lee Min-hee of BNK Investment & Securities explained, "Amid the ongoing AI server infrastructure investment cycle by big tech companies, sales to data centers of North American company G, a major customer of Isu Petasys, grew 142% last year." She added, "Double-digit growth is expected this year as well," and noted, "The proportion of high-value-added AI accelerator models and switch products is expected to rise from 20% in Q1 last year to 44% in Q4 this year." She emphasized, "Monthly orders for AI accelerators to North American GPU companies are expected to double this year," and forecasted, "Annual sales are expected to increase fourfold to 80 billion KRW."