[Good Morning Stock Market] "NVIDIA Earnings Announcement... Volatile Market Expected Centered on Semiconductor Stocks"

On the 21st, the KOSPI is expected to exhibit a volatile market, centered on AI-related semiconductor stocks, influenced by Nvidia's earnings announcement. With the Korea Exchange announcing a rebalancing of the Korea Value-Up Index, there are also expectations that value-up themes such as bank stocks and telecommunications stocks, which have faithfully fulfilled their value-up disclosures, will continue their price rallies.

Yonhap News

Following Ukraine's missile attack on mainland Russia the previous day, which heightened geopolitical tensions, the three major indices of the U.S. New York Stock Exchange closed mixed near the opening levels on the 20th (local time).

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 43,408.47, up 139.53 points (0.32%) from the previous trading day. The large-cap-focused S&P 500 index rose slightly by 0.13 points (less than 0.1%) to 5,917.11, while the tech-heavy Nasdaq index fell 21.33 points (0.11%) to close at 18,966.14.

Nvidia, which attracted market attention, reported a surprise third-quarter (August to October) earnings. After the market closed on the 20th (local time), Nvidia announced that its fiscal year 2025 third-quarter revenue reached $35.08 billion, with a net profit of $19.3 billion (earnings per share (EPS) of $0.78 and adjusted EPS of $0.81). Compared to a year ago, revenue surged by 94% and net profit by 109%. However, Nvidia's stock price fell in after-hours trading as its fourth-quarter revenue outlook fell short of market expectations.

The domestic stock market is also expected to see increased volatility due to the heightened Russia-Ukraine tensions and disappointment over Nvidia's fourth-quarter revenue forecast.

Ji-won Kim, a researcher at KB Securities, said, "With the escalation of Russia-Ukraine geopolitical tensions, a renewed preference for safety, and concerns about the economy triggered by Target, the U.S. stock market showed mixed performance. Nvidia reported quarterly earnings exceeding expectations and announced that Blackwell demand exceeds supply, with shipments planned within the year. However, due to disappointing guidance and slowing revenue growth, Nvidia's after-hours stock price declined. Given the multiple risk factors, caution is needed regarding increased volatility in the domestic market as well."

There are also forecasts that volatility will be centered on semiconductor stocks. iM Securities stated, "Although Nvidia's third-quarter earnings surpassed market expectations, marking an earnings surprise, it showed weakness in after-hours trading. Therefore, attention should be paid to volatility in domestic semiconductor-related stocks."

Seong-hoon Lee, a researcher at Kiwoom Securities, said, "We believe that the domestic stock market will reflect the contents of Nvidia's earnings announcement in stock prices and exhibit a volatile market centered on AI-related semiconductor stocks. Additionally, as customer deposit outflows and trading volume contraction continue in the domestic market, a sector rotation market without clear leading stocks is inevitable."

Meanwhile, starting from this day, the Korea Exchange and others will begin disbursing funds from a 200 billion KRW scale Value-Up Fund, with plans to raise an additional 300 billion KRW fund later. Furthermore, the Exchange has announced special inclusions without exclusions for companies that have properly fulfilled their value-up disclosures, and a special rebalancing of the Korea Value-Up Index is also anticipated by the end of the year.

Researcher Seong-hoon Lee forecasted, "As the year-end approaches, additional price rallies in value-up themes such as bank stocks and telecommunications stocks, which have recently disclosed value-up policies, are expected."