Bargain Buying Returns to Samsung, SK Hynix a Day After Meta-Led Selloff

Bargain hunters are moving back into South Korea’s two biggest chipmakers, Samsung Electronics Co. and SK Hynix Inc., just a day after a Meta Platforms Inc.-driven shock sent the stocks sharply lower.

As of 9:13 a.m. on July 3, Samsung Electronics was trading at 295,500 won, up 9,500 won, or 3.32%, from the previous session and testing a return to the 300,000-won level. SK Hynix was up 1.1% at 2.211 million won.

Both companies’ shares tumbled the previous day after news that Meta was moving into the artificial intelligence cloud infrastructure business. That fueled concerns the company’s cloud push could signal overinvestment in AI data centers.

Brokerages, however, said it was an overreach to interpret the development as evidence of excessive AI spending.

"Computing power is still in a state of absolute shortage, and with AI demand surging recently, there is a strong possibility that the entire industry, including Meta itself, is facing shortages," Samsung Securities analyst Kim Joong-han said. Meta has also continued to focus on expanding computing power, signing large contracts with neo-cloud and data center infrastructure companies until recently, he added.

The recent volatility in chip stocks reflects investor sentiment being shaken by conflicting interpretations of the same development, rather than the emergence of a new negative factor, Samsung Securities analyst Cho A-in said. If second-quarter earnings come in above market expectations, doubts about the durability of AI investment could ease, she said.

Mirae Asset Securities estimates total capital spending by global big tech companies will reach $806 billion this year, up 73% from a year earlier, based on the latest company guidance. The brokerage expects spending to rise by more than 20% again next year despite a high base.

Order backlogs also remain solid. Combined remaining performance obligations disclosed by global big tech companies in the first quarter totaled $2.1 trillion, up 24% from the prior quarter alone. Of that, about $656 billion can be recognized as revenue within two years.

"It is difficult to view this latest Meta issue as signaling a decisive reduction in AI infrastructure investment," Mirae Asset Securities analyst Kim Young-gun said. "This is a valid window for bargain buying in semiconductor stocks."

Sentiment was also helped by news that Samsung Electronics is reviewing AI chip production with Anthropic.

The Information, a U.S. technology publication, reported that Anthropic is discussing a plan to make AI chips using Samsung Electronics' foundry division's 2-nanometer manufacturing process and advanced packaging facilities.

Noh Jeong-dong, Hankyung.com reporter dong2@hankyung.com