South Korea's KOSPI index has now declined for five consecutive sessions from October 6 to the present, accumulating a loss of nearly 15% and touching a low of 5911.11 during Asian trading hours, marking its weakest level since August 3.
Although the KOSPI is composed of more than 800 stocks, Samsung Electronics and SK Hynix carry a combined weighting of over 50%, meaning the index's direction essentially tracks the price movements of these two companies. Since October 6, Samsung Electronics' local share price has dropped from 279,500 Korean won to a low of 228,000 won, a cumulative decline of 18.42%, while SK Hynix shares have fallen from 1,837,000 won to 1,445,000 won, a cumulative drop of 21.33%. The simultaneous plunge of these two heavyweight stocks is the primary driver behind the KOSPI's five-session losing streak. Over the same period, NVIDIA's share price in the U.S. also declined, but its loss remained under 6%, far milder than the performance of the Korean index and its related individual stocks.
From this perspective, NVIDIA possesses a deeper and more stable economic moat than Samsung Electronics and SK Hynix. In the U.S. market, memory chip names such as SanDisk, the PHLX Semiconductor Index components, and Micron Technology have shown price trajectories similar to those in the Korean market, suggesting that the memory sub-sector within artificial intelligence may be facing systemic risk. The AI industry has long grappled with the dilemma of high upfront investment paired with difficulty in realizing profits later. The current collective selloff in memory stocks may signal that the market's focus has shifted from heavy capital expenditure toward profit realization. On the other hand, expectations for Federal Reserve rate hikes are growing stronger, with a possible second increase in December. Companies with high capital expenditures face rising interest expenses and declining valuations in a higher-rate environment.
In the second quarter of 2026, NVIDIA reported revenue of $96.22 billion, more than doubling year-on-year; gross profit of $72.14 billion, up 113.1% year-on-year; and net profit of $59.69 billion, up 125.9% year-on-year. All three key metrics showed substantial growth, underscoring NVIDIA's still-broad market potential. By the end of the second quarter, NVIDIA's debt-to-asset ratio stood at just 28.5%. Although higher than the 24.67% recorded in the first quarter, it remains far below the traditional warning threshold of 80%. Low leverage on one hand and high revenue on the other explain why NVIDIA's decline has been so limited amid the broader AI sector selloff.
Some arguments suggest that ChangXin Memory Technologies possesses stronger product competitiveness and could potentially erode memory market share. However, upon review, ChangXin Memory Technologies' share price began falling as early as September 23 and has since accumulated a loss exceeding 16%, performing just as poorly as Samsung Electronics and SK Hynix. Based on this, the aforementioned argument clearly does not hold. We are more inclined to believe that the AI industry still faces an unresolved business model problem—the hundreds of billions in annual capital expenditure by tech companies may not be offset by either consumer-facing or enterprise-facing revenue.
Aside from South Korea's KOSPI, other major global stock indices have maintained relatively modest fluctuations since October 6, with the UK's FTSE 100 even posting a gain of 1.51%. This indicates that the downturn affecting high-speed memory sub-products within the AI sector has not yet triggered widespread panic. The mainstream market view still regards artificial intelligence as a high-growth industry capable of driving inflation and fueling economic recovery. Accordingly, the Korean KOSPI may still resume its upward trend once market confidence recovers or the Federal Reserve eases its tight monetary policy.
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