Foreign Buying Storm Sends KOSPI Above 6,000 as Big Tech Earnings Ignite Semiconductor Rally

The KOSPI jumped 13.9% to reach 6,392 points, while the KOSDAQ rose 9.2% to 704 points. The won-dollar exchange rate rose early in the session before falling to 1,436 won alongside foreign buying. Foreign investors posted record net purchases of roughly 7.3 trillion won on the KOSPI, with the top buys being Samsung Electronics, SK hynix, and Samsung Electro-Mechanics, in that order.

The rally was interpreted as a recovery from the sharp decline in semiconductor and AI-related stocks over the past month. Since peaking in late June, U.S., Japanese, and Taiwanese semiconductor stocks corrected roughly 20%, while the Korean market fell roughly 40% further — a divergence analysts attributed to market doubts about the actual profitability of the AI ecosystem. As Google, Microsoft, and Amazon reported earnings in sequence, those doubts eased, which was cited as the driver behind this surge.

The yen-dollar rate also drew attention. The Bank of Japan held its policy rate at 1%, its first pause since June's hike. The yen-dollar rate rose intraday to 164 yen before dropping sharply, presumably amid signs of BOJ market intervention. Japan may have sold U.S. Treasuries to fund the intervention, which could put upward pressure on U.S. rates — a factor flagged as a potential drag on equities.

Microsoft's remaining performance obligations, booked as future revenue, rose 84% year-on-year, and cloud revenue growth accelerated from 40% to 43%, surpassing $100 million in annual revenue (note: unit unclear, figure cited from the broadcast). Even as capital expenditure rose roughly 80%, from $64.6 billion to $115.9 billion, $67.0 billion remained as free cash flow out of $182.9 billion in annual operating cash flow. Since most of the backlog consists of actual contracts with mainstream corporate clients, the market judged the quality to be sound as well.

Meta, by contrast, saw free cash flow shrink to around $700 million, drawing online mockery describing the company as having 'declared poverty.' Research and development spending surged 67%, and combined with legal costs and severance expenses from large-scale layoffs, the earnings-per-share outlook was cut from the $7 range to $6. Analysts attributed this to the fact that Meta's AI investment is still aimed at internal advertising-efficiency gains rather than external sales, meaning monetization lags.

The panel assessed that Microsoft sells AI directly as a product, generating immediate cash inflow, whereas Meta earns indirectly through AI-driven advertising efficiency, meaning returns take longer to materialize. Still, expectations were raised that if investments in Reality Labs, including smart glasses, bear fruit, Meta could see a major leap forward in three to four years.

Amazon posted revenue of roughly $200.6 billion (key figure cited from the broadcast), beating guidance, while AWS revenue reached $42.2 billion, above the $40.5 billion estimate and up 37% year-on-year. AWS operating margin came in at 39.4%, well above the 33.8% estimate. Amazon's in-house server chip, Graviton, is now used by 98% of its top 1,000 customers, and customer revenue commitments tripled from the prior quarter.

Amazon's free cash flow also flipped from net inflow to a net outflow of $7.6 billion, but the market took this positively after the earnings call noted that server investments typically reach breakeven in under three years on average, against a service life of five to six years. Over the past month, CDS premiums on Big Tech debt had been rising steadily, fueling doubts about their debt-servicing capacity, but as Google, Microsoft, and Amazon reported earnings in sequence, those premiums began to retreat.

Apple's revenue and earnings per share themselves were not bad, but Greater China revenue came in at $18.8 billion, below the $19.5 billion estimate, and services revenue also missed expectations. This was attributed to price cuts amid intensifying competition from Chinese rivals such as Huawei. Operating cash flow, however, remained ample, reaching $117.0 billion over nine months, up 43% year-on-year, and share buybacks this quarter doubled to $25.0 billion from $12.3 billion in the prior quarter.

SK Group Chairman Chey Tae-won purchased 3,620 new common shares of SK hynix before the market open. The purchase totaled roughly 4.8 billion won, the maximum amount allowed without prior disclosure. Given the group's holding-company structure, this marked the first time Chairman Chey has directly held SK hynix shares, seen as a rare instance of an owner's direct share purchase following Samsung Vice Chairman Lee Boo-jin's recent purchase of Hotel Shilla shares.

Following the news, SK hynix ADRs jumped in premarket trading, and UBS set a $204 price target on the ADR. SK hynix ADRs closed the day around $149. UBS said the current valuation does not sufficiently reflect the structural improvement in memory industry profitability.

Samsung Electronics surged 21% to around 250,000 won, and SK hynix jumped 25% to around 1,659,000 won. The panel noted that SK hynix had recently drawn market criticism for poor investor relations, and said this purchase is fueling expectations for shareholder-return measures likely to follow the lifting of U.S. ADR disclosure restrictions on August 4. Expectations are also building that Samsung Electronics could announce a shareholder-return plan worth about half its free cash flow in early August.

In his final earnings call, Tim Cook said memory chip prices could surge like a once-in-a-century flood. He noted that with the DRAM supply market being an oligopoly of three to four firms, Apple is reviewing ways to diversify its supplier base, though it remains uncertain whether adding suppliers would actually bring prices down. There were also indications that Apple approached China's ChangXin Memory Technologies (CXMT) for supply but was quoted a higher price, and the talks fell through.

The panel pointed out that the current rise in DRAM prices stems not from the oligopoly structure itself but from an AI-driven demand surge. The oligopoly has persisted for more than a decade, while the recent price increases reflect a sudden jump in demand — meaning Apple's diagnosis misses the underlying cause. It was also noted that as Apple prepares to roll out a wave of new on-device AI products next year, memory demand could intensify further.

Because this comment came from an actual end-demand giant directly acknowledging memory shortages and price pressure, it was seen as carrying more credibility with the market than the optimistic remarks made by executives at domestic memory makers, including SK Chairman Chey Tae-won. Going forward, three factors were flagged as key to Apple's share price: whether it can pass on costs, whether it can recover China market share, and whether its new products' AI competitiveness gains market acceptance.

From today, a requirement to hold 30 million won in cash to trade single-stock leverage products took effect. However, confusion arose because settlement of sale proceeds takes T+2 days, meaning proceeds from a sale are not immediately recognized as cash. The host criticized regulators sharply for slow implementation, noting that President Lee Jae-myung had ordered the settlement period shortened to one day, yet this has not actually been carried out.

Additional measures under discussion include capping total investment at about 20% of an account's total assets, and adopting a Hong Kong-style variable leverage system. The latter, seen as the most powerful option, would let regulators immediately cut the leverage ratio to as low as 1x depending on market conditions, effectively neutralizing the leverage effect temporarily. However, concerns were raised that revising terms and higher-level regulations could delay implementation.

The panel argued that the recent volatility surge stems from a structure in which leverage products let the tail wag the dog, and stressed that even as the market shows signs of recovery, the pace of regulation should not slow — if anything, it should accelerate. Retail investors' continued net selling even during this rally was attributed to anxiety over volatility, and it was noted that the market can only find a genuine bottom and stability once that anxiety subsides.

Host Lee Kwang-soo reminded investors who had endured the recent sharp sell-off of Warren Buffett's investment principles: 'Rule No. 1: never lose money. Rule No. 2: never forget Rule No. 1.' He stressed that in investing, minimizing losses matters more than maximizing gains as the key to surviving long-term in the market. He explained that KOSPI's intraday volatility has been steadily widening over the past year — swings once around 2% now often reach 7-9% in a single day.

He said that in such a high-volatility environment, the odds of forecasts going wrong and resulting in losses rise, and advised investors to set clear rules based on their own position — holding both stocks and cash, holding only stocks, or holding only cash. Investors holding stocks should set a pre-determined plan to sell 30-40% of their position if the index falls below a certain level (e.g., KOSPI below 5,100), and stressed they should never sell everything and leave the market entirely.

For investors holding cash, he recommended not rushing to buy during a period of high volatility like now, but instead waiting until volatility narrows before buying in installments. He pointed out that selling during a rally like today's actually stems from a 'maximize gains' mindset, which does not belong under the principle of minimizing losses in the first place, and noted that many investors make poor decisions out of an obsession with profit.

He again urged investors not to leave the market but to stay in it, closing by telling those who had endured a difficult stretch from the recent sell-off that it was fine to blame others or even blame the show's host, as long as doing so helped them stay in the market.