KOSPI Opens Up 4%, Foreigners Turn Net Buyers Ahead of Alphabet Earnings

KOSPI opened up more than 4% today, with KOSDAQ also rising nearly 2%. Foreign investors led the flows, buying a net KRW 1.97 trillion-plus in the KOSPI cash market and over KRW 500 billion in futures. The won strengthened to the 1,480 range against the dollar, holding firm even as the US dollar index weakened and the yen also softened — a combination the hosts viewed positively.

Intraday, KOSPI extended gains to over 6%, climbing near 1,166 points, and a buy-side sidecar was triggered just six minutes into the session — the 20th such trigger this year. By sector, large-cap electronics/electrical equipment names drew over KRW 2.3 trillion in foreign net buying, with purchases concentrated in SK Hynix and Samsung Electronics. Top buy names included SK Hynix, Hanwha Solutions, and LG Electronics.

The hosts examined the growing narrative that semiconductors have bottomed. Bloomberg noted that historically, a 20% pullback from highs in the Philadelphia Semiconductor Index has marked a buying opportunity, and UBS offered a similar view that the current correction level presents a buyable range. However, the hosts cautioned that once prices rise, the bottom-fishing logic itself disappears, so this should not be treated as grounds for a sustained uptrend.

The hosts also offered an interpretation that yesterday's strength in the Korean market influenced New York trading. After the local market closed yesterday, Samsung Electronics and SK Hynix extended gains in NXT trading, lifting the US premarket, and combined with news of expected progress in Iran-US talks, the Philadelphia Semiconductor Index rose over 5%. Investor deposits climbing back to KRW 112 trillion and margin balances falling to KRW 33 trillion were also cited as grounds for the market's recovery.

Early in the broadcast, the hosts urged SK Chairman Chey Tae-won to stop offering only reassuring words and instead announce concrete, timely shareholder return measures such as share buybacks and cancellations or buybacks tied to performance-based compensation. They noted that SK Hynix shares had fallen from the 370,000-won range to the 260,000-won range, arguing it would not be unusual for the company to issue a return-focused message whenever the stock wobbles.

On Samsung Electronics, the hosts suggested the company should use its previously planned share cancellation and the buyback earmarked for performance-based compensation as a market signal. They contrasted this with US Big Tech, which tends to buy back and cancel large volumes of stock precisely when share prices fall to defend valuations, whereas Korean firms tend to act only when share prices are already rising — the opposite approach.

Citing Apple as an example, the hosts explained that reducing share count even as corporate value grows increases scarcity and underpins price support and appreciation. They also noted the unusual recent trend among US hyperscalers, including the M7, of increasing share count through equity issuance to fund massive capital investment.

Comparing dividends and buybacks, the hosts pointed to statistics showing buybacks are more effective at enhancing shareholder value over long time horizons, and noted that Korean firms' historical preference for dividends stemmed from controlling shareholders' incentive to receive cash directly. The segment closed with the case of Samsung Electronics Chairman Lee Jae-yong, whose personal wealth grew as the stock rose to the 300,000- and 400,000-won range, concluding that a buyback-and-cancellation-centered return culture needs to spread more widely in Korea.

SK Hynix rose over 5%, touching the 1.93-million-won level. A media outlet exclusively reported that SK Hynix was pursuing acquisition of Intel's Ohio fab, but SK Hynix stated in a disclosure that while it continuously reviews various investment and acquisition opportunities, it has neither pursued nor decided on acquiring the Ohio site.

The hosts noted that the US government is Intel's largest shareholder and that the Ohio fab is currently unprofitable, and the market interpreted the report as a signal of possible capacity expansion by SK Hynix in the US. Given that Chairman Chey Tae-won recently remarked that chip prices cannot keep rising indefinitely and that shipment volume needs to expand, the mere possibility of such investment was received positively.

However, the hosts noted that building a new fab in the US carries heavy cost burdens due to labor regulations, making acquisition of an existing fab a more rational option for SK Hynix than new construction. Being able to utilize existing infrastructure such as cleanrooms was viewed as not unwelcome news.

Alphabet (Google) reports second-quarter earnings before dawn Korea time tomorrow. Market consensus stands at roughly $2.88 EPS and about $116 billion in revenue. As the first M7 name to report, the hosts framed it as a potential turning point for the semiconductor rebound.

Deutsche Bank raised its Google Cloud second-quarter revenue growth forecast from 65% to 70%, and to as high as 75% for the second half. It also raised its capex forecast — from an existing $250 billion to $325 billion for 2027, and to a range of $365-370 billion for 2028. The hosts explained that the market's key focus is less the scale of investment itself than how much Google Cloud revenue growth and AI investment returns translate into actual earnings.

From a semiconductor investor's standpoint, the hosts identified three things to watch: the underlying strength of the earnings themselves, whether capex growth exceeds expectations, and whether TPU external sales expand. They noted that Google has ample and stable funding capacity, so the market harbors little doubt about its ability to finance investment.

The third point, TPU, is an AI chip Google designed in-house, originally used internally for products like Gemini, but the company has recently signaled it is considering external sales. If demand extends beyond Nvidia GPUs to TPUs as well, that could be read as a signal the AI chip market itself is expanding — making any comments on TPU external sales the single most important thing to watch in tomorrow's earnings.

Alphabet shares fell 1-3% in yesterday's US session, which the hosts interpreted not as pre-emptive selling on weak-earnings expectations but as typical wait-and-see caution ahead of a major event. They also noted that this earnings season, stock reactions to strong results have been muted compared to before, and that the market has begun scrutinizing guidance and future contract scale in greater detail.

Related stocks surged on news that Samsung Electronics will establish an RX business task force reporting directly to the CEO. President Roh Tae-moon will personally lead the organization, overseeing mid- to long-term robotics business strategy, core hardware/AI/software technology development, and design and product planning. On the KOSDAQ today, SPG jumped 28% and Rainbow Robotics rose over 21%.

Expectations that Samsung Electronics would inevitably enter the robotics business have circulated for some time, and speculation about a potential stake acquisition in Boston Dynamics had also previously surfaced. This time, the move has been made concrete through the establishment of a dedicated internal organization, with the hosts also raising the possibility that Samsung could unveil a robot at CES 2027.

The hosts noted that Samsung's response appears somewhat late compared to Hyundai Motor Group, which embedded robotics as a group-wide theme after acquiring Boston Dynamics and has since built synergy with Hyundai Autoever and Mobis, and LG Electronics, which has been steadily preparing its robotics business. Still, given Samsung's ample cash reserves, the market is said to expect not only collaboration among affiliates but also capability-building through M&A. News also emerged today that Hyundai Motor and Samsung will jointly supply military robot dogs.

According to Bloomberg, the share of tokens processed by US companies that comes from Chinese AI models has expanded to 58% in recent months, rising further to 63% in July. Starting with DeepSeek, and more recently with models like Kimi K3, Chinese models have rapidly eroded the real-world usage share of US firms.

The hosts noted that US and Chinese models pursue fundamentally different strategies. The US approach favors large, closed models offered globally on a paid basis, while China is pursuing a thoroughly open-source, cost-competitive strategy to challenge the market the US has already claimed. This was compared to the historical split between Microsoft and Linux across consumer and enterprise markets.

Given that AI model companies' core revenue source is the B2B enterprise market, which is far larger than the consumer market, Chinese models' erosion of the enterprise market was flagged as an issue directly tied to the survival of US AI firms and, by extension, the stability of the financial ecosystem ahead of planned listings by companies such as OpenAI and Anthropic.

The hosts noted that China's DeepSeek, Moonshot AI, Alibaba, ByteDance, and Meituan are all set to release new models in succession this year, and that at the government level China is both controlling the leakage of core technology and launching a domestic AI ecosystem initiative called the 'Galaxy Project' to reduce dependence on Nvidia. They concluded that the outcome of the AI race ultimately hinges on funding and chip-acquisition speed, and that regardless of which side prevails, demand will remain for Korean semiconductor firms.

As a follow-up to the AI regulatory negotiations agreed during President Trump's visit to China, the first formal US-China AI dialogue is likely to take place around President Xi Jinping's planned visit to the US on September 24. Treasury Secretary Bessent is expected to represent the US side, with the agenda expected to cover the risks of frontier AI models and regulatory approaches, including military applications, cyberattacks on critical infrastructure, and labor market impact.

Secretary Bessent stated today that the US will soon control 80% of global AI computing power, a claim made even as standards for measuring computing power and the very definition of frontier AI remain unagreed — suggesting the upcoming talks may need to start at the level of agreeing on basic terminology.

Reports also indicated that the White House is internally weighing an outright ban on the use of Chinese AI models. The hosts read this as serving a dual purpose — checking China's AI capabilities while also protecting the planned listings of US AI firms such as OpenAI and Anthropic and the stability of the surrounding financial ecosystem.

The hosts noted that the fact a summit-level meeting is being pursued again just two months after the prior US-China summit ended without a clear trade agreement itself underscores the urgency of the AI issue. For Korea, given that either side will ultimately need semiconductors, the hosts suggested the government should keep AI cooperation channels open with both the US and China.

In today's intro, host Lee Kwang-soo, who anchored the broadcast, noted that the stock market opened higher and has held those gains into the afternoon, and stressed that investors should not chase every morning-rise, afternoon-dip pattern by reacting each time. His advice was to take a longer view and shed impatience.

He pointed out that the very act of asking what to do about a slight pullback today is itself evidence of reacting to price movements. He reiterated the principle that investors should not react to price but should respond according to their own plan.

Midway through the broadcast, he reaffirmed the core principle that stocks should be sold when they are falling, not when they are rising, and cautioned against the impulse some investors show today — in a sharply rising market — to hastily sell after barely recovering from a loss position. He noted that with the 6,500 level holding as support, the past three to five days show signs the system is functioning again, and urged viewers not to panic but to watch the market calmly.

He reaffirmed that investment plans should follow predetermined criteria regardless of price movement, and that selling to lock in even small gains every time the market rises is not investing. He also warned that short-term trades placed in anticipation of a specific event amount to gambling, noting that the Noon Salon team accepts no investment solicitation fees or commissions, and cautioned viewers not to be lured by the recently prevalent AI trading-room scams.