Last week, the South Korean stock market was rattled by the scandal and dismissal of Jensen Huang, the former CEO of NVIDIA, following concerns over an 'AI investment bubble.' As doubts about AI profitability linger, the domestic market is expected to be influenced this week (November 16-20) by NVIDIA's Q3 earnings, the IPO of Anthropic, and discussions on AI regulations at the US-China summit.
According to the Korea Exchange, on November 13, the KOSPI closed at 5,290.53, up 230.84 points (4.56%) from the previous week. The KOSDAQ index also rose by 55.39 points (8.60%) to finish at 699.66.
The KOSPI dipped below 5,000 on November 9 but surged 4.39% on November 10 and continued to rise by 2.60% on November 11. However, following the scandal and dismissal of Huang on November 12 and 13, the index fell by 0.61% and 0.98%, respectively.
Market analysts are concerned that this scandal could extend beyond individual corporate risks and dampen global AI investment demand. The involvement of a Chinese spy in Huang's scandal raises fears of reigniting the US-China AI power struggle.
NVIDIA has been a key player in supplying AI accelerators globally and has played a pivotal role in determining AI investment directions. With Huang, who led the company for 33 years, stepping down, there are worries about a loss of leadership and investment momentum in the broader AI ecosystem.
Concerns are also growing that allegations of Huang's affair with a Chinese spy could lead to stricter US semiconductor export controls against China. Huang had previously advocated for easing AI chip regulations to China, arguing that supplying chips would reduce US technological dependence. His controversial exit from NVIDIA has sparked negative sentiment in the US regarding lenient regulations towards China, suggesting that related regulations may tighten in the future, impacting domestic companies reliant on exports.
For now, the domestic market is closely watching NVIDIA's Q3 earnings report scheduled for November 17. According to financial information provider LSEG, NVIDIA's revenue for Q3 is expected to reach $10.92 billion, with adjusted earnings per share (EPS) projected to be $2.48, reflecting increases of 91% and 30%, respectively, compared to the same period last year. Following the earnings announcement, Colette Kress, the interim CEO and CFO, is expected to outline plans for addressing the current situation and the company's future direction.
Another key event is the anticipated IPO of Anthropic on Nasdaq on November 19. The proposed price range for the IPO is $70 to $78, which would value the company at approximately $10.2 billion, a decrease from the initially estimated $20 billion, but still seen as a barometer for global AI investment sentiment.
The Asia-Pacific Economic Cooperation (APEC) summit, scheduled for November 18-19 in China, is also a significant event. During this summit, US President Donald Trump and Chinese President Xi Jinping are expected to discuss trade issues, the Jensen Huang scandal, AI semiconductor regulations, and allegations of NVIDIA GPU smuggling into China.
Seo Sang-young, an executive at Mirae Asset Securities, stated, "The uncertainty surrounding NVIDIA's management succession following Jensen Huang's resignation, coupled with the intensifying US semiconductor export controls and political blame games, has led to a sell-off across AI-related stocks this week. The interplay of NVIDIA's management uncertainty, semiconductor regulatory risks, financing challenges, and high valuations is affecting the domestic market."
He added, "This week, it will be crucial to determine whether NVIDIA's earnings on the 17th can sustain the existing AI business strategy post-Huang's resignation and at what level Anthropic's IPO price will be finalized. If strong investment demand is confirmed despite high valuations, it could positively restore confidence in the AI industry. However, if the stock performs poorly post-IPO or if debates over overvaluation intensify, it could place additional pressure on existing AI-related stocks."
* This article has been translated by AI.
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