NVIDIA CEO Jensen Huang stated that the tech stock sell-off is a "buying opportunity," adding that AI development has "only just begun."
Source: Jin Shi Data
NVIDIA Corporation (NVDA) CEO Jensen Huang labeled the global tech stock sell-off that began last week as a buying opportunity, stating that the development of artificial intelligence is only just beginning.
On Monday, South Korea's benchmark Kospi index fell sharply, leading a broad sell-off of Asian tech stocks, as investors retreated from bets on AI that were driving the global bull market. Concerns about overheating in AI trading have caused a cooling of global tech stocks, with U.S. tech stocks plunging on Friday due to fears of possible interest rate hikes by the Federal Reserve.
When asked how to interpret this sell-off, Huang remarked that the industry is still in the early stages of building the infrastructure that will become the cornerstone of an AI-driven future.
NVIDIA and SK Hynix announced a multi-year technology partnership on June 8, focused on collaborative R&D for next-generation memory needed for global AI factory construction, applying AI technology to semiconductor chip design and manufacturing.
According to the agreement, SK Hynix will collaborate with NVIDIA on developing dedicated memory for the Vera Rubin AI supercomputer, Vera CPU, RTX Spark PC, and Jetson Thor robot computing platform, thus entering new markets such as AI infrastructure, personal AI, and physical AI that NVIDIA is exploring. This represents a victory for this leading South Korean company competing with Samsung Electronics in this hot sector.
After South Korean President Lee Jae-myung stated on Monday that he believes the South Korean stock market is still undervalued, some stocks, including SK Hynix, reduced their losses.
“We are at the beginning; no matter what happens in the stock market, you should feel very happy because now you can buy at a discount,” he said. “Everyone should feel very excited,” he stated to reporters after meeting with SK Group Chairman Chey Tae-won in Seoul.
Like many of his industry peers, Huang has long believed that AI will fundamentally change vast areas of the global economy and transform how people work and live. This, in turn, will drive significant demand for data centers and chips, which are essential for future AI services.
“AI will become the infrastructure of the world, just as the internet once was the infrastructure of the world; this is a conclusion that has already been reached,” he stated.
Goldman Sachs Strategist Expects South Korean Stock Market to Rebound After "Terrifying" Correction
Goldman Sachs Chief Asia Pacific Equity Strategist Timothy Moe stated that the South Korean stock market is expected to rebound after the sharp drop that triggered the circuit breaker.
“In the long run, this will prove to be a technical correction, although it is a terrifying correction within a long-term bull market,” Moe said in a Bloomberg TV interview, adding that “the underlying fundamentals remain very, very strong.”
“There are clear signs that speculative activity has increased, especially among South Korean retail investors, particularly in some leveraged ETFs,” Moe noted, “What we are seeing is that leverage has magnified some of the unwinding of accumulated positions.”
Goldman Sachs raised its outlook for the South Korean stock market last week, citing expectations that the AI boom will drive profit growth in this tech-heavy market. Moe stated on Monday that the valuations of South Korean stocks are very reasonable, and he expects potential profits to continue to drive growth.
“After the market turbulence, we believe it will regain its footing and move towards higher peaks,” he said.
South Korean AI Boom Putting Pressure on Government Bond Market
However, the South Korean bond market is experiencing significant selling pressure, driven by an economy that is accelerating due to both the AI boom and the semiconductor cycle.
So far this year, South Korean government bonds denominated in local currency have fallen 7.5%, ranking lowest among 44 markets tracked by Bloomberg. Yields have risen sharply, with the three-year government bond yield reaching about 3.9% on Friday, the highest level since 2023.
The core driver of this change is not recession risk but rather overly strong economic growth. The expansion of AI investment and a surge in chip demand have caused the South Korean economy to reheat, leading to higher price levels and reinforcing market expectations for tighter monetary policy.
Samsung Electronics and SK Hynix have attracted significant capital into the stock market, driving a sharp rise in the Kospi index, but this has also amplified market volatility. The real estate market is also heating up, with Seoul apartment prices rising for 70 consecutive weeks, creating sustained upward pressure on inflation.
Exchange rate factors further exacerbate the pressure. The weakening won has increased import costs and may prompt the South Korean central bank to adopt more aggressive interest rate hikes.
Cho Yong-gu, a fixed income strategist at New England Securities, pointed out: “This is a self-reinforcing vicious cycle, and there seems to be no clear way out at the moment.” He believes the bond market is trapped in a negative feedback loop driven by growth, inflation, and policy expectations.
The interest rate market has made significant adjustments in response to the policy path. Swap transactions indicate that investors expect the South Korean central bank to raise interest rates at least three times this year, with the policy rate projected to rise from the current 2.5% to 3.25%.
Cho Yong-gu further predicted that the three-year and ten-year South Korean government bond yields could rise to 4% and 4.4% respectively within the year.
Economic data supports this expectation. Driven by the prosperity of the chip industry and the approximately 80% rise in the Kospi index, the South Korean central bank has raised its economic growth forecast for 2026 from 2% to 2.6%.
Inflation is also showing signs of spreading. Core inflation in May stood at 2.5%, indicating that price pressures have spread from the energy sector to a broader range of goods and services.
The South Korean Ministry of Finance and the South Korean central bank issued a statement stating they will continue to monitor the bond market and will quickly take action in the event of excessive volatility.
Aside from interest rate expectations, bond supply has also become a focus of market attention. The current government tends to expand fiscal spending, but tax revenues related to chips may fall short of expectations, meaning that future bond issuance may need to increase. KB Securities analyst Lim Jae-kyun pointed out that if the 2027 budget proposal includes large-scale fiscal spending, it will further drive up interest rates. He expects that once the policy rate rises to 3.5%, the ten-year government bond yield could reach 4.4%.
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