Alphabet’s AI spending news traveled across the Pacific and lit up Korean markets too
The KOSPI, rattled last week by “Kimi K3 shock” fears, has fully reversed course. Today (July 23), the index came out of the gate strong, triggering a buy-side sidecar, and ultimately closed up 4.40% at 7,096.89. Samsung Electronics and SK hynix surged in tandem to lead the charge, and foreign investors extended their net-buying streak to a fourth straight session.
Something Was Off From the Open — A Buy-Side Sidecar Kicked In
The KOSPI opened up 2.44% at 6,963.35. As the gain widened rapidly, a buy-side sidecar (a five-minute halt on program sell orders) was triggered on the exchange, and the index climbed as high as 7,137.20 intraday, briefly clearing the 7,100 level. It gave back some of that gain afterward, but still closed solidly higher, up 299.19 points (4.40%) at 7,096.89. The KOSDAQ echoed the move, jumping 39.19 points (5.22%) to 790.28.
Samsung Electronics and SK hynix Fully Erase the “Kimi K3 Shock”
Once again, semiconductor bellwethers led the rebound. Samsung Electronics closed up 3.65% at 270,000 won, while SK hynix rose 4.86% to 1,919,000 won. Last week, the surprise release of Chinese AI developer Moonshot’s open-source “Kimi K3” model had weighed on chip stocks amid fears it could weaken the AI infrastructure investment narrative — but that concern has completely reversed course this week. Kim Seok-hwan, an analyst at Mirae Asset Securities, explained that as time has passed, the continued rollout of AI models across various segments — and the resulting rise in overall usage, along with intensifying technological competition among the companies involved — has actually come to be reinterpreted as a tailwind supporting memory and server demand.
The decisive trigger, however, was Alphabet’s earnings. After Alphabet posted strong cloud results and reaffirmed its plans to expand capital expenditures, hopes that data center investment would keep climbing were revived. Lee Kyung-min, an analyst at Daishin Securities, said Alphabet’s strong cloud earnings and expanded CAPEX plans reaffirmed robust AI infrastructure demand and a continued data center investment trajectory, which supported broader AI investment sentiment. Buying spread well beyond semiconductors into power equipment, secondary batteries, and biotech. In particular, as concerns emerged over power grid supply disruptions in US data center hubs, power infrastructure names like LS Electric and HD Hyundai Electric rallied sharply. The “AI power crunch” theme covered here yesterday around Doosan and HD Hyundai has now spread to additional names as well.
Foreign Investors Bet Alone While Individuals Take Profits
On the flow side, foreign investors stood out. They were net buyers of 2.1351 trillion won, effectively driving the index’s gains, extending their net-buying streak to four consecutive sessions. Institutions were modest net buyers as well, at 101.1 billion won. Individual investors, by contrast, were net sellers of 2.2107 trillion won, cashing in on the recent run-up. The fact that foreign capital continues flowing in steadily even amid lingering external uncertainty is being read as a factor that lends credibility to this rebound.
Investor Takeaways and Expert Views
⚠️ Things Investors Should Watch
- From worry to euphoria in a week — narratives can flip fast: Just a week ago, the dominant story was the “Kimi K3 shock” and fears of shrinking AI infrastructure investment. Given how quickly market narratives can reverse in the opposite direction, as they did this week, a flexible approach beats going all-in on any single fear or hope.
- Watch the divergence between individuals and foreign investors: Today, foreign investors bought aggressively while individuals took profits. If this kind of flow divergence persists, the index rising doesn’t mean every individual investor is feeling the same gains.
- Frequent sidecars are still a sign of elevated volatility: Buy- and sell-side sidecars have already been triggered dozens of times this year. Even as the index rides an upward wave, it’s worth remembering that underlying volatility remains elevated.
- Be selective in the early stages of a theme’s expansion: The AI power crunch theme has spread from Doosan and HD Hyundai to names like LS Electric and HD Hyundai Electric. Not every stock caught up in a theme shares the same fundamentals, making it important to verify whether actual orders and earnings follow through.
📌 What Experts Are Saying
- Kim Seok-hwan, Mirae Asset Securities analyst: Noted that bargain-hunting flowed into semiconductor names that had fallen sharply last week, with expectations around AI server and memory demand growth widening once again. He explained that the Kimi K3-driven concern has been reinterpreted, with the ongoing rollout of diverse AI models, the resulting rise in usage, and intensifying technological competition all now seen as factors reinforcing memory and server demand rather than undermining it.
- Lee Kyung-min, Daishin Securities analyst: Assessed that Alphabet’s strong cloud earnings and expanded CAPEX announcement reaffirmed robust AI infrastructure demand and continued data center investment, supporting AI investment sentiment. He added that despite lingering external uncertainty, foreign investors drove the index higher by extending their net-buying streak to four consecutive sessions.
Taken together, today’s rally reflects the complete unwinding of concerns that had weighed on chip stocks last week, catalyzed by Alphabet’s earnings. Still, it’s worth keeping an eye on how quickly such reversals can flip again, along with the ongoing divergence between foreign and individual investor flows. Whether this week’s upcoming Big Tech earnings and the continued spread of the theme into Korea’s power, battery, and biotech sectors are actually backed by real fundamentals will be the next thing to watch.