NVIDIA logo. Reuters News Agency
NVIDIA, a leading U.S. semiconductor design company, shocked the market with better-than-expected performance, but its stock plummeted, causing a ripple effect in the domestic market. As of the morning of the 29th, semiconductor giants such as Samsung Electronics and SK Hynix have been on a downtrend since the opening of the market.
On this day, Samsung Electronics is currently trading at 74,200 won, down 2.88% from the previous day’s closing price at 11:05 a.m. SK Hynix is trading at 169,600 won, down by 5.41% compared to the previous day.
SK Hynix, which soared to its all-time high of 248,500 won on the 11th of last month, has dropped by 30% from its peak. Suppliers to SK Hynix, such as HSMC, also fell by 8.14%.
Due to the weakness in the semiconductor sector, the KOSPI index also dropped by more than 1% in the early trading session, only to recover slightly. As of 11:30 a.m., the index was down by 0.79% to 2,668.69.
However, local experts predict that the impact of NVIDIA’s performance announcement may be limited. Kim Ji-hyun, a researcher at Kiwoom Securities, predicted that the sharp decline would be limited as foreign investors have been net sellers of Samsung Electronics and SK Hynix for three consecutive days with neutral expectations.
On the other hand, sectors benefiting from the strength of the Korean won are expected to be advantageous, especially in the pharmaceutical-bio and value-up sectors such as automotive and banks.
In the New York stock market closing the previous day, NVIDIA fell by 2.1%, but after the performance announcement, it extended its losses by 6-7% in after-hours trading. Although the performance results exceeded expectations, causing the stock price to decline.
NVIDIA’s earnings per share (EPS) was $0.68, surpassing the estimated value of $0.65, and revenue reached $30 billion, exceeding the expected revenue of $28.9 billion.
The projected revenue for the next quarter was $32.5 billion, higher than experts’ forecasts of $31.9 billion. Experts attribute the stock price decline to high expectations not being met.
Stock market in the United States showed weakness in tech stocks following concerns over NVIDIA’s performance. Semiconductor companies such as Micron (-3.07%), AMD (-2.75%), and Applied Materials (AMAT, -1.47%) declined together with NVIDIA.
Super Micro Computer (-19.02%) plummeted as Hindenburg Research published a short selling report, along with announcing a delay in submitting the last fiscal year’s annual report.
Hwang Soo-wook, a researcher at Meritz Securities, expects that if key semiconductor company officials participate in the semiconductor exhibition in Taiwan from September 4 to 6, including NVIDIA CEO Jensen Huang, it could help alleviate market concerns.