The signing of a new cooperation agreement by NVIDIA CEO Jensen Huang with SK Hynix has not provided a boost to the South Korean memory chipmaker's stock price.
In the South Korean market, shares of SK Hynix opened 10.3% lower, while shares of fellow memory chip supplier Samsung Electronics opened down 10.9%. The KOSPI index dropped as much as 8.8% during the session, though all three subsequently pared some of those losses.
This year, SK Hynix and Samsung Electronics have been primary drivers of the KOSPI index's strong rally, which is up 94% year-to-date. However, the index fell 6.2% last Friday amid broad pressure on artificial intelligence (AI)-related trades, and it declined another 6.1% in early Monday trading.
Stephen Innes, Managing Partner at SPI Asset Management, noted in a Substack post that while one day does not make a trend, traders should take note when the hottest AI playground in the market suddenly turns into a fire drill. He added that based on Monday's price action, South Korean investors woke up to find their market at the epicenter of a global AI trade unwinding, which is clearly not a pleasant situation.
Nevertheless, Innes cautioned that it remains early in the trading day for South Korean markets. Regarding the AI trade, he wrote that the real conclusion will only be drawn once London traders open and the latest developments from the New York market are seen.
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