'Momentum for AI Software Stocks' Expected to Continue... US-China Tariff Conflict a Burden [Weekly Outlook]

Last week, our stock market was supported by news of collaboration between 'DeepSeek' and 'Sam Altman, CEO of OpenAI', among others, which bolstered AI software-related stocks. This week (February 10-14), with some AI software companies in the US scheduled to announce their earnings, there is an expectation that the momentum for related stocks will continue domestically. However, the tariff policies of US President Donald Trump and China's retaliatory measures are considered burdens on the stock market.

On the 9th, NH Investment & Securities Research Center projected the expected range for the KOSPI this week to be between 2450 and 2580. The KOSPI closed at 2521.92 on the previous trading day, the 3rd.

Looking back at last week, the stock market was volatile due to the 'tariff shock'. Trump announced that he would impose a 25% tariff on Canada and Mexico and an additional 10% on China as planned, causing a significant drop in stock prices on the 3rd. However, the market rebounded after an agreement was reached to have a one-month grace period with Canada and Mexico just a day before the tariffs were to be imposed. Although China announced retaliatory tariffs, the impact on the US was limited, allowing the KOSPI index to recover to the 2500 level.

The shock from China's DeepSeek was a negative factor for the semiconductor sector but a positive one for software companies like Naver and Kakao. This was due to the expectation that, like DeepSeek, high-performance AI models could be created at low cost. It was also reported that Kakao had entered into a strategic partnership with OpenAI.

This week, AI software stocks are expected to continue playing a leading role. While the big tech earnings announcements are wrapping up, AI software companies like Applovin and Datadog still have earnings announcements scheduled. Strong earnings from US AI software companies could translate into momentum for domestic software stock prices.

Shin Seung-jin, a researcher at Samsung Securities, stated, "Investor interest in AI growth stocks remains high," and added, "We expect full-scale cooperation from domestic companies in the trilateral alliance of Korea, the US, and Japan to maintain AI technology supremacy, overcoming the shock from China's DeepSeek."

Na Jeong-hwan, a researcher at NH Investment & Securities, said, "High-performance AI models developed with low-performance GPUs can serve as opportunities for AI software companies, and the AI cycle is expected to gradually shift from B2B hardware to B2B software," adding, "As the flow of funds moves towards the previously neglected software sector, it could positively impact software stock prices." However, he advised, "It is recommended to selectively invest in stocks that are actually recording growth in earnings by utilizing AI, such as Palantir in the US or Duzon Bizon in Korea."

However, the US-China tariff war anxiety is a burden, especially for export-driven economies and stock markets like Korea. President Trump is reportedly set to speak with Chinese President Xi Jinping within a few days. Even just confirming the schedule for a conversation between the two leaders could provide room for negotiation, offering some relief to the stock market. Na Jeong-hwan noted, "The direction of the stock market will be determined by the results of the conversation between the two leaders."

Shin Min-kyung, Hankyung.com reporter radio@hankyung.com