[Edaily Reporter Park Soon-yeop] Although domestic and international stock markets have entered a period of sharp correction, analysts say it is too early to conclude that the artificial intelligence (AI) investment cycle has ended. While volatility may increase in June due to a cluster of variables—including inflation, monetary policy, the private lending market, and major IPO events—the consensus is that second-quarter earnings momentum could create new market opportunities starting in July.
Kim Byung-yeon, an analyst at NH Investment & Securities, stated in a report published on the 8th, “Volatility in financial markets increased over the weekend.” He added, “With inflation, interest rates, and exchange rates already weighing on financial markets, Broadcom’s earnings announcement, concerns over reduced memory capacity in NVIDIA’s Vera Rubin platform, and stronger-than-expected U.S. employment data served as triggers for the correction.”

The first factor to shake the market was skepticism regarding AI semiconductor demand. Broadcom presented a third-quarter AI semiconductor revenue guidance of $16 billion. While this represents a 200% increase year-over-year, it fell short of market expectations of $17.2 billion. Market disappointment grew further as the company did not raise its fiscal 2027 AI semiconductor revenue target from the previously announced $100 billion.
Compounding this was concern over slowing memory demand related to NVIDIA’s next-generation platform, Vera Rubin. On the 4th, SemiAnalysis reported that the SOCAMM DRAM—or system memory capacity—per rack for the Vera Rubin NVL72 could be reduced by about half compared to the original plan, and the following day, rumors spread that the memory specifications for the Rubin platform might be downgraded. This is the backdrop against which concerns about a potential slowdown in AI server memory demand have spread across the entire semiconductor industry.
However, NH Investment & Securities viewed it as premature to interpret this as a slowdown in the overall AI investment cycle. The firm argued that adjustments to system memory capacity, demand for High Bandwidth Memory (HBM), accelerator shipments, and rack-level system revenue should be evaluated separately. Analyst Kim explained that orders, backlogs, and HBM margins—which will be confirmed during the second-quarter earnings season—will serve as more important benchmarks for assessing trends in the AI infrastructure sector.
U.S. employment data also heightened concerns about interest rates. U.S. nonfarm payrolls rose by 172,000, significantly exceeding the market forecast of 80,000. While the unemployment rate remained at 4.3%, the confirmation of strong employment growth pushed market odds of a Federal Reserve (Fed) rate hike within the year up to 70%. Consequently, short-term interest rates rose more sharply than long-term rates, increasing pressure on growth stocks.
However, Analyst Kim assessed that it is difficult to conclude that this strong employment data indicates a structural re-heating of the labor market. This is because employment in the leisure and hospitality sector increased by 70,000 and local government employment by 55,000, with these two sectors accounting for approximately 73% of total new jobs. The interpretation is that temporary service sector hiring ahead of the World Cup and expanded local government recruitment likely drove up the figures.
NH Investment & Securities characterized the June market as a period requiring “confirmation” rather than “direction.” This is because a series of events are scheduled, including the May Consumer Price Index (CPI), potential supply-demand disruptions following the SpaceX IPO, the policy stance of the first Federal Open Market Committee (FOMC) meeting chaired by Wash, the possibility of increased redemptions from private loan funds at quarter-end, the MSCI country classification review, and second-quarter earnings previews.
The key variable is Wash’s perception of monetary policy. The firm explained that it is crucial to determine whether Wash will maintain the logic he has previously articulated, even under current inflation and employment conditions. Analyst Kim noted that Wash is likely to reiterate his argument that productivity gains from AI investments could alleviate inflationary pressures, and that considering the downward stabilization of wages and the trimmed-mean Personal Consumption Expenditures (PCE) index, further rate hikes are unnecessary.
NH Investment & Securities judged that Wash is more likely to opt for a dovish hold rather than a hawkish one. Even if sufficient statistical data supporting productivity gains has not yet been accumulated, he could dispel concerns about rate hikes by presenting the argument that AI investment can boost potential growth and productivity, thereby curbing inflation. Conversely, if Wash takes a hawkish stance contrary to market expectations, market interest rates are expected to rise further, and an increase in short-term volatility would be inevitable.
Concerns that instability in the private lending market could spread to the financial system were deemed excessive. The analysis explained that while Warsh had opposed the expansion of quantitative easing in the past, this did not constitute a rejection of the Fed’s role as lender of last resort, but rather an opposition to the direct stimulation of the real economy using central bank assets. It was assessed that if a crunch in the short-term money market or financial system risks emerged, the Fed would likely step in to stabilize the market through liquidity support programs.
Regarding the domestic stock market, analysts forecast that earnings differentiation will become crucial following the recent correction. The semiconductor sector has risen for nine consecutive weeks, leading to accumulated short-term overbought conditions; combined with Fed uncertainty, this could trigger profit-taking and position liquidation. However, the firm believes that if earnings momentum—including orders, backlogs, and HBM margins—is confirmed for leading AI infrastructure companies during the second-quarter earnings season, the polarization within the sector could widen again.
In particular, hyperscalers were assessed as being relatively advantaged because they are less interest-rate sensitive than long-duration sectors such as biotech and offer higher cash flow and earnings visibility. In the Korean market, key events on the horizon include #Samsung Electronics’ second-quarter operating profit forecast, the MSCI country classification review, and the July listing of #SK Hynix ADRs. While these could increase supply-demand volatility in the short term, analysts view them as factors that enhance the global accessibility and revaluation potential of the Korean semiconductor sector in the medium term.
The recent sharp rise in the won-dollar exchange rate was also viewed as a factor driving sector-specific differentiation rather than a negative for the market as a whole. This is because while a weaker won puts pressure on the overall valuation of the domestic stock market, it can increase the won-converted profits of export-oriented companies. NH Investment & Securities predicted that the rising exchange rate would deepen the earnings polarization between domestic demand-driven stocks and export-oriented stocks, as well as between sectors burdened by rising costs and those benefiting from the exchange rate.
Researcher Kim stated, “There are many variables to monitor in June, including inflation, the FOMC, the private lending market, the MSCI review, new listings, and shifts in supply and demand,” adding, “Until the Fed’s policy stance becomes clear, high volatility is likely to persist, particularly around interest rates, exchange rates, and growth stocks.” However, he explained, “There is no need to interpret this correction as the end of the AI investment cycle or a deterioration in the fundamentals of Korean exporters,” adding, “Earnings previews for the second quarter are expected to begin in mid-to-late June, and in July, earnings visibility for high-quality AI infrastructure companies is expected to come back into focus.”