Kospi Falls 1.2% as Samsung Stock Drops 4.1% Amid AI Spending Concerns
Key Facts
The Kospi index fell 1.2% in the October 29 session, as Samsung Electronics shares dropped 4.1%, according to the Associated Press. EL7 data showed the index closing at 5,937.66 points, compared with 6,012.44 points at the previous session’s close. The decline followed strong market gains in the preceding days; on October 27, the Kospi rose more than 4% during the session and was up 3.6% at 5,667.99 points by midday, according to the Associated Press. SK hynix shares rose 7% in that session, while Samsung shares gained 4.8%. The contrasting moves across sessions highlighted chip stocks’ sensitivity to changes in investors’ assessment of the AI outlook.
Selling pressure on Samsung shares came despite the company reporting higher profits, according to the Associated Press, which said the stock lost 4.1% in the session. The company said it expects HBM4 to surpass the HBM3E generation in shipment volume and revenue in the fourth quarter. It added that HBM4 will become the dominant product during that period. The results and outlook put strong chip demand alongside falling shares, as investors assess the cost of expansion and its expected return.
In the United States, concerns focused on Alphabet’s capital spending after its purchases of property and equipment exceeded 51 billion dollars in the third quarter, according to the Associated Press. The agency said the company consumed more cash on a free cash flow basis. The figures revived debate over the scale of resources required for AI investments. The issue has a direct bearing on chip companies that benefit from demand for computing and memory equipment, as their expansion is linked to technology companies’ spending on infrastructure. The results of a U.S. company therefore affected investors’ assessment of technology stocks in South Korea.
South Korea’s economy faces particular exposure to any change in semiconductor demand, given the sector’s importance to its trade. The Associated Press warned that the economy’s reliance on chips could amplify the impact of any AI-related downturn. This means a potential slowdown in spending could affect more than moves in Samsung and SK hynix shares, reaching exports and economic activity. The two companies’ results and SK hynix’s fourth-quarter outlook remain among the indicators investors monitor when assessing demand. The October 29 session brought together a fall in the index and Samsung shares with a rise in SK hynix shares, reflecting companies’ differing responses to the same concerns.