[Edaily Reporter Kim Hyung-il ] Although the domestic stock market recovered some of its losses, led by semiconductor stocks, it remains unclear whether a full-fledged rebound will follow. This week, in addition to earnings reports from SamsungElectronics(005930)and SK hynix(000660), earnings reports from major U.S. tech companies are also scheduled. Whether increased investment in artificial intelligence (AI) will translate into actual profits and whether rising oil prices stemming from the Middle East will spill over into inflation and economic headwinds are expected to determine the direction of the stock market.

According to MP Doctor on the 25th, the KOSPI closed at 5,550.30 on the 23rd, up 0.3% from the previous trading day. After plunging 3.52% the previous day, semiconductor stocks recovered their losses and drove the index higher. SK hynix rose 4.41% on news that U.S.-based Solidigm had suspended its consideration of an initial public offering (IPO), and SamsungElectronics also gained 0.46%. In contrast, the KOSDAQ closed at 751.69, down 1.62%, indicating that the rebound did not spread across the broader market. On the KOSPI, institutional investors were net buyers of 872.3 billion won, while foreign investors were net sellers of 992.8 billion won, showing mixed trends among different market participants.

The key event this week is the release of semiconductor earnings reports. SK hynix is scheduled to report earnings on the 28th, followed by SamsungElectronics on the 29th. In the U.S., earnings reports from Microsoft, Alphabet, and Amazon are also on the horizon. The market is expected to scrutinize not only revenue growth but also the scale of AI data center investments, free cash flow (FCF), and conditions for raising investment capital. Key points of interest include whether Big Tech companies, which are continuing large-scale capital expenditures, can fund these investments with their own cash flow, and whether expanded investment will actually lead to improved profitability.

Shinhan Investment Securities recently analyzed that the recent market anxiety stems not from AI demand itself, but from doubts about whether companies can sustain such large-scale investments. The firm explained that, with Meta revealing cash flow strain due to massive capital expenditures and credit risks among AI infrastructure companies rising, the market is now seriously scrutinizing the profitability of these investments. In fact, CoreWeave’s 5-year credit default swap (CDS) premium rose from 4.69 percentage points on June 22 to 11.13 percentage points on October 16. In contrast, indicators for the memory market remain robust. The DRAM spot price index hit a year-to-date high of 1,153,202 on the 16th. The key to a rebound in semiconductor stocks lies in whether the strength of the physical market will translate into corporate earnings and cash flow.

Solidigm’s decision to suspend its plans for a U.S. IPO is viewed as a positive development for SK hynix’s shareholder value, as it alleviates concerns over a discount to enterprise value and equity dilution resulting from a dual listing. However, some analysts note that this does not fully alleviate market concerns regarding funding for AI investments, given that opportunities for raising external capital may diminish. While NVIDIA CEO Jensen Huang’s remark that the likelihood of a memory supply glut by 2029 is low supports expectations for the industry, the market appears to be seeking confirmation not only of supply outlooks but also of actual investment demand and profitability.

Oil price trends are another variable. IBK Investment & Securities assessed that concerns over the 2027 economic outlook are growing as international oil prices continue to rise amid escalating tensions in the Middle East. At the time the report was written, Brent crude had risen to $113 per barrel, and West Texas Intermediate (WTI) was approaching $100. Rising oil prices could exacerbate inflationary pressures, weaken expectations for interest rate stability, and weigh on AI investment and financing conditions. Consequently, interest rate stability accompanied by falling oil prices is cited as a prerequisite for the recovery of investor sentiment toward risky assets.

KB Securities also analyzed that, to confirm a bottom in the recent stock market, indicators that alleviate inflation concerns or events that trigger a decline in oil prices are necessary. The assessment is that even though a rebound has occurred following the sharp decline, it is too early to conclude that this marks a trend reversal; if inflation and interest rate conditions worsen again, a W-shaped correction could ensue. In contrast, SamsungSecurities interpreted the recent sharp decline not as a definitive signal of the bursting of an AI bubble, but rather as a process of reevaluation surrounding the sustainability of semiconductor companies’ profits and the appropriate valuation for the domestic stock market.

Byeon Jun-ho, an analyst at IBK Investment & Securities, stated, “Stabilization of oil prices is a prerequisite for a stock market rebound.” He added, “A stabilization of falling oil prices will lead to a stabilization of falling interest rates, and lower interest rates are highly likely to alleviate issues related to AI investment and funding,” analyzing that “from the stock market’s perspective, this is a time when falling interest rates, accompanied by falling oil prices, are needed.”