“AI investment will last; 5,000 is the floor for the KOSPI”

Even as the artificial intelligence (AI) industry continues to grow, concerns over semiconductors have yet to subside. Against this backdrop, forecasts suggest the AI investment cycle will last longer than in the past. Some companies may face funding concerns amid high interest rates, but analysts say this is unlikely to lead to an industry-wide pullback in AI investment.
At a press briefing marking the first anniversary of the Growth-Led Korea Fund at FKI Tower in Yeouido, Seoul, on the 19th, Park Jin-ho, head of equity management at NH-Amundi Asset Management, forecast, “Given operating profits on the KOSPI, 5,000 is around the floor,” adding, “The market will rebound if confidence in long-term semiconductor supply contracts builds.”
The market expects Samsung Electronics and SK Hynix to post operating profits exceeding 900 trillion won next year. Even assuming, conservatively and in a worst-case scenario, that the two companies’ operating profits total 300 trillion won, some believe 5,000 is still the floor for the KOSPI.
The recent correction in South Korea’s semiconductor sector was seen as the result of concerns over the durability of AI investment amid high interest rates, combined with intensifying competition from China. The explanation was that fears of a pullback in investment had been reflected in the market as rising interest rates increased borrowing costs while enormous sums were being invested in AI infrastructure.
However, Park said new business models are emerging as AI agents become more widespread, and he expects AI-related investment to continue regardless of the interest-rate environment. Some companies may have difficulty raising funds, he said, but the likelihood of this leading to an industry-wide pullback in AI investment is limited.
Park said, “During the zero-interest-rate era, investment wasn’t very active because there was nowhere to invest. AI is an industry that affects every area, from manufacturing and healthcare to everyday life, and if it’s clear that it will make money, investment will continue even when interest rates are high.” He added, “Unlike during the IT bubble of the 2000s, companies that are making a lot of money are investing now. In CoreWeave’s case, since it is a new cloud provider, I think it was the ‘weak link’ that broke. Even if some big tech companies experience business disruptions, AI business models will expand explosively.”
He noted that concentration in large-cap stocks such as Samsung Electronics and SK Hynix needs to be reduced to manage volatility. Accordingly, the Growth-Led Korea Fund plans to diversify its investments across semiconductor materials, components and equipment, as well as financials and energy.
Choi Chi-hyeon, a manager in NH-Amundi Asset Management’s Equity Management Division 2, said, “AI growth will continue, but the pace and direction of its rise will differ from those of the past year. The strategy of holding large-cap stocks remains valid, but we plan to shift part of our allocation to semiconductor materials, components and equipment companies to generate additional alpha.”
[email protected] Seo Min-ji Reporter