KOSPI Nears 6900 as AGI Era Dawns, Semiconductor Stocks Surge—Samsung Electronics, SK Hynix Target Prices Repeatedly Raised

On the 7th, the KOSPI rose roughly 3% to close at 6897, touching the 6900 mark intraday, while the KOSDAQ climbed about 1.4% to pass 825. Foreign investors net bought roughly 960 billion won in KOSPI cash equities and about 10 billion won in KOSDAQ, and purchased around 1.3 trillion won in the futures market, extending net buying for a third straight session. The won traded around 1,345 per dollar, its lowest in two years, showing a stable trend.

Gains widened as the session progressed, with the KOSPI approaching its intraday high of 6919 as it headed toward the close. Foreign investors concentrated their buying in the electronics sector, particularly large caps such as Samsung Electronics and SK Hynix. On the KOSDAQ, nuclear power-related stocks, semiconductor materials/parts/equipment names, and robotics stocks continued to extend gains.

The previous day, all three major New York indices closed lower after August's nonfarm payrolls report beat expectations, dimming rate-cut hopes, but the Philadelphia Semiconductor Index alone rallied more than 3%. Interpretations included both a rotation of profit-taking from software stocks into hardware, and growing conviction in semiconductor investment following OpenAI's new model unveiling.

This Tuesday brings South Korea's second-quarter GDP and Japan's GDP release, while Wednesday sees South Korea's August unemployment rate and the start of the U.S. Treasury's long-term bond buyback. Apple's new foldable iPhone unveiling is also scheduled for the same day, drawing attention to the competitive dynamics with Samsung Electronics in the foldable market.

Thursday is the quadruple witching day for Korean index futures and options, alongside the release of the U.S. August Producer Price Index (PPI) and TSMC's August revenue. After the U.S. market closes Thursday, Oracle and Adobe are set to report earnings, with the results expected to be reflected in Friday's trading. Friday brings South Korea's early-September export data along with the U.S. August CPI, which is seen as the key variable for the FOMC's rate decision next week.

Korea Zinc's extraordinary shareholders meeting is also scheduled for Wednesday. Amid the ongoing management control dispute between the incumbent management and MBK Partners, a private equity fund, a vote is expected to fill vacant board seats, drawing attention to the outcome of the shareholding battle. The European Central Bank (ECB) will also hold its monetary policy meeting this week, with a rate hike forming the consensus.

Nomura issued a report maintaining its target price of 670,000 won for Samsung Electronics and 4.7 million won for SK Hynix. On concerns over a potential breach of long-term supply agreements (LTAs) that had recently stirred controversy, it assessed that a simple breach would be difficult given the five-year contract terms, which include a 20% premium along with advance payment and penalty clauses, and said this actually supports earnings visibility. Domestically, Mirae Asset Securities raised its target price for SK Hynix from 2.8 million won to 3.1 million won and for Samsung Electronics from 370,000 won to 400,000 won.

Goldman Sachs summarized comments from a non-deal roadshow (NDR) with Samsung Electronics and maintained a buy rating with a target price of 490,000 won. The company reportedly stated that the memory supply shortage would persist through 2028, with demand fulfillment at only around 60% while demand continues to grow. It also explained that it is preemptively securing cleanroom capacity while executing actual equipment investment cautiously based on confirmed demand.

The company also reportedly stated its goal of raising the share of long-term supply contracts to 60-70% of its total production plan, which was interpreted as an effort to make future demand more predictable and reduce investment volatility. It was also suggested that being the only company capable of operating both memory and foundry businesses simultaneously would become a key competitive advantage as customized customer demand increases going forward.

Finally, the company reaffirmed its existing policy of returning 50% of cumulative free cash flow from 2024-2026 to shareholders, stating that it is reviewing all options, including early dividend execution and share buybacks. However, the market pointed out that the gap between the current share price and actual earnings levels is unusually large, with the assessment that while earnings and valuation provide support, a re-rating will require the company to follow through with active shareholder returns and transparent communication.

Amid expectations of expanding power demand from AI data centers, solid oxide fuel cell and hydrogen energy-related stocks such as Doosan Fuel Cell and Bumhan Fuel Cell rallied. Doosan Fuel Cell surged more than 17%, a contrasting move from earlier when its stock plunged more than 10% on the very day news broke of a roughly 50 billion won fuel cell order win in the U.S. Bloom Energy, a U.S. peer, also saw its stock strengthen recently after citing strong sales in its earnings release.

Regarding Doosan Enerbility, the largest shareholder of Doosan Fuel Cell, additional news during the broadcast that SpaceX is pursuing a large combined-cycle power plant using Doosan Enerbility's generation equipment drove broad gains across related stocks. Demand spread further to on-site power generation, cables, power equipment, and nuclear power-related stocks.

The NCR project, cited as the No. 1 project for U.S.-bound investment, raised expectations with an increase in project cost and a scheduled report to the National Assembly on the same day. However, it was noted that the special purpose company (SPC) structure has not yet been clearly finalized, requiring confirmation of whether it can actually translate into U.S.-bound revenue. Given the high volatility of power and energy-related stocks, advice was offered to take a long-term approach such as staggered buying rather than short-term trading based on news.

OpenAI's full rollout of its new model, GPT-6 Astra, prompted the market to begin interpreting it as an early model of the AGI (Artificial General Intelligence) era. AGI refers to artificial intelligence capable of learning and reasoning to solve a variety of problems on its own, much like a human, and unlike prior AI that performed only a single specific task, Astra was noted for demonstrating a more advanced level of interaction, such as proactively suggesting next steps to the person asking questions.

Nvidia CEO Jensen Huang stated on his Twitter account that Astra was trained on more than 100,000 Nvidia Grace Blackwell GPUs and that it took just four years to go from GPT-5.1 to Astra, remarking that AGI had already arrived. He also noted that an additional 400,000 GPUs would be deployed to OpenAI, reinforcing conviction around expanded hardware investment.

On this news, SK Hynix ADRs surged more than 8% on U.S. markets, and semiconductor-led gains also emerged in the domestic market. Doubts had persistently been raised over the lack of tangible results from massive AI investment, but the Astra unveiling was seen as evidence proving the correlation between expanded investment and actual performance gains.

Anthropic's initial public offering (IPO) was also discussed. The timeline, originally expected in August, is reportedly being adjusted to a mid-October roadshow with listing completion just before the U.S. midterm elections in November. Concerns were cited that a Democratic victory in the midterms could fuel anti-data-center sentiment, which would be unfavorable for IPO demand, as a factor behind the schedule adjustment, alongside concerns that the large capital raise could act as a black hole absorbing market liquidity.

U.S. nonfarm payrolls for August rose by 162,000, far exceeding the market consensus of a 55,000 increase. July's figure was also revised up from a decline of 20,000 to a gain of 2,000. The labor force participation rate edged up to 61.6% from 61.5%, slightly above expectations. By sector, leisure and hospitality saw the largest job gains, with government adding 35,000 and goods-producing industries adding 40,000, while the IT sector, which is exposed to AI-driven disruption, shed 20,000 jobs.

The unemployment rate held steady at 4.1% from the prior month. The rise in leisure and hospitality employment was attributed to the effects of the North American World Cup and the summer peak season. Average hourly earnings rose 3.1% year-on-year, falling short of inflation, which drew criticism that real wage improvement remained limited.

With employment data deviating sharply from market expectations for three consecutive months, questions have arisen about the reliability of the statistics themselves. Last month's release came in about 80,000 below expectations for a negative surprise, while this time it came in roughly 110,000 above expectations in the opposite direction. As a result, the market's focus appears to be shifting away from the employment report and toward this week's August Consumer Price Index (CPI) release.

The Federal Reserve has maintained a hawkish stance on price stability, and with employment coming in hotter than expected as well, the probability of a rate cut has actually declined ahead of the September FOMC meeting. According to FedWatch, the rate-cut probability, which had risen to as high as 70% last week, fell to around 59.4% following this release.

A securities firm CEO (referred to as CEO Park Sung) and a guest agreed that Korea does not yet have a U.S.-style blue chip that rises steadily over time, like Coca-Cola or Walmart. The guest explained that Korea, as an export-driven country, has greater volatility, and that companies like Coca-Cola differ in having a large domestic market and a long track record of proven performance, expressing hope that Samsung Electronics and SK Hynix might one day attain that kind of standing. CEO Park suggested sectors with steady stability, such as instant noodle makers or bank stocks, as alternatives.

Another guest compared investing to floating in a lazy river, saying that good stocks change over time. Rather than discovering and holding onto a specific stock, they recommended investing in assets that many people already recognize as good, and handling responses in a planned manner individually. They noted that countries with long histories of capital markets, including the U.S., commonly favor index investing, and expressed the view that the Korean market is currently the most undervalued in the world, making it an opportune time for index investing.

In response to a listener question about niche mineral themes such as tungsten, the guest stressed the principle of not investing in products one does not understand. They noted that complex, difficult financial products are often designed to generate returns only under specific conditions, and advised that investment success depends not on hitting a jackpot with one or two stocks but on steadily compounding returns of 5-10% over time. They added that an annual return of 7-10%, which doubles principal within five years, is by no means a small achievement.

Finally, they presented a so-called popularity-vote theory, arguing that stocks rise because they attract popularity, whereas discovering and holding an obscure stock that no one else knows about rarely leads to gains. They concluded that even with flawless metrics like PER and PBR, a stock will not rise without market consensus, and that investors are better served approaching easy-to-understand stocks that many people agree on.

Host Lee Kwang-soo shared his view on whether buying dollars is a rational investment amid the recent won strength that has pushed the exchange rate down to the low 1,300s. He noted that while it is true the current exchange rate level is low, it is uncertain whether the rate will rise again in one to two years or three years, and if returning to a past peak level yields only around 20%, it is questionable whether that is an attractive return relative to the time horizon involved.

He distinguished between buying the dollar itself as an investment asset and investing in dollar-denominated assets such as U.S. stocks and bonds, calling them entirely different matters. When converting to dollars to invest in U.S. assets, two functions—currency gains and asset price appreciation—operate simultaneously, which he said requires a far more complex calculation than a simple currency bet.

In conclusion, he stated that holding dollars purely for investment purposes should be avoided, and that it is only rational to hold dollars when there is an actual purpose for use, such as study-abroad funds, and to do so when the exchange rate is low in order to reduce volatility. Citing the yen as an example, he also pointed out that the yen is merely a currency that bears no interest and offers no real benefit as an investment asset.