NVIDIA’s results ease AI concerns, boosting Japanese and Korean tech stocks, with South Korea’s index hitting a new high and the US dollar weakening.
NVIDIA’s robust earnings report lifted Asian tech stocks across the board, with the MSCI Asia-Pacific Index rising 1% to hit a new all-time high. South Korea’s SK Hynix surged over 2%, Samsung Electronics gained more than 5%, and Japan’s SoftBank rose 4%. Analysts are generally optimistic about the prospects of the AI supply chain, but some expressed caution regarding concerns over excessive investment and competitive dynamics, noting limited recovery in market confidence. The US dollar softened, gold edged up slightly, and Bitcoin fell below $68,000.
NVIDIA’s strong earnings report boosted market confidence, driving Asian tech stocks higher across the board in early Thursday trading, with semiconductor-related shares in South Korea and Japan leading the gains.
During the Asia-Pacific session on Thursday, the MSCI Asia Pacific Index rose 1% to hit a record high, while the KOSPI climbed 1.77%, also reaching a new all-time high.
NVIDIA’s earnings report had the most direct positive impact on Asia’s AI supply chain. SK Hynix, a key supplier of NVIDIA’s high-bandwidth memory, rose more than 2% in early trading, while Samsung Electronics gained over 5%. LG Innotek, a South Korean component manufacturer, soared nearly 14%, and Seoul Semiconductor surged 13%.
(South Korea’s two storage chip giants, Samsung Electronics and SK Hynix, continued their upward trend during the day.)Dan Ives, Senior Equity Research Analyst at Wedbush Securities, stated:
Given the explosive growth in data center demand, this is a positive signal for many Asian supply chain companies, including SK Hynix and Samsung.
Dan Niles, Portfolio Manager at Niles Investment Management, pointed out that the current market dynamics remain favorable for semiconductor infrastructure stocks rather than software stocks, adding that NVIDIA remains ‘the true kingpin of all this infrastructure.’
The Japanese market also recorded significant gains. The Nikkei 225 Index pared earlier gains to close up 0.55%. Meanwhile, the TOPIX Information & Communication Index rose over 2%, extending its 0.58% gain from the previous trading session. SoftBank Group climbed 4%, and Sony Group rose about 3%.
(The Nikkei 225 Index rose 0.55%)Andrew Jackson, head of Japanese equity strategy at ORTUS Advisors, stated that capital will continue to flow into AI-related targets. He expressed optimism about Japanese companies in the gallium nitride and silicon carbide sectors, such as Fuji Electric, noting that investors are positioning themselves for an ongoing data center construction cycle.
However, Bloomberg strategist Tatiana Darie pointed out that while NVIDIA’s earnings were generally robust, some on Wall Street were disappointed by the company’s lack of additional details regarding its outlook and the factors driving it. In her view, although this earnings report may alleviate AI-related concerns to some extent, doubts surrounding the competitive landscape and the sustainability of infrastructure investment will persist.
Yugo Tsuboi, chief strategist at Daiwa Securities, also adopted a cautious stance:
The difficulty of capital flowing back into this sector is gradually increasing and no longer as smooth as last year. Ultimately, market concerns about overinvestment and the sustainability of investments have not dissipated due to NVIDIA’s performance.
On a broader market level, the US dollar continued to weaken during the Asia-Pacific session on Thursday, with the Bloomberg Dollar Spot Index falling by 0.2%. The ICE Dollar Index declined by 0.12%.
Gold rose by 0.2% to $5,176 per ounce as traders assessed the impact of geopolitical tensions in the Middle East and US tariffs on global trade. Meanwhile, the rebound momentum of Bitcoin slowed, dropping by approximately 1% and falling below $68,000.
