As the previously surging KOSPI recently underwent a correction alongside large-cap semiconductor stocks such as Samsung Electronics and SK hynix, concerns are growing in the market that the domestic stock market may already have passed its peak. In the securities industry, a bullish view interpreting the recent decline as temporary ‘noise’ from the sharp rally and expecting semiconductor stocks to keep rising coexists with a bearish view that the pace of profit growth at semiconductor companies will gradually slow, which could also cool investor sentiment.

On the 9th, the KOSPI closed at 7,291.91, up 45.12 points (0.62%) from the previous session. Samsung Electronics finished at 278,000 won, up 0.18%, and SK hynix ended at 2,186,000 won, up 5.30%.

SK hynix, which is set to list in the United States, managed to rebound, but the KOSPI and Samsung Electronics saw only a ‘slight’ rebound.

Having surged since late last year, the KOSPI has recently alternated between sharp rises and falls and is down 22% from its peak (9,385.59). Samsung Electronics and SK hynix have also fallen 26% and 27% from their respective peaks. As the two semiconductor stocks, which account for more than half of KOSPI market capitalization, declined, a peak-out theory emerged in the market that the domestic stock market has passed its zenith.

The securities industry has assessed that investor sentiment could weaken as the pace of profit growth at semiconductor companies is expected to slow in line with a deceleration in artificial intelligence (AI) investment by U.S. Big Tech firms.

Byun Junho, an analyst at IBK Investment & Securities, said, “The growth rate of semiconductor earnings is expected to decline after peaking (peak-out).” He added that although the earnings of Samsung Electronics and SK hynix are expected to continue rising in the second half of this year and into next year, margins and earnings growth rates appear likely to turn lower.

Byun said, “Semiconductor share prices and foreign investor flows tend to move in line with earnings growth rates,” adding, “With growth for the semiconductor sector next year slowing, investor sentiment also faces the possibility of declining after peaking.”

Heo Jaehwan, an analyst at Eugene Investment & Securities, also said of the recent weakness in the domestic market, “The fundamental reason is concern that the pace of data center investment growth by Big Tech will slow next year.” He said, “Around late July, when Big Tech companies announce results and investment plans, could be an inflection point that changes the current corrective trend in semiconductors.”

There are also cautious views. Noh Dong-gil, an analyst at Shinhan Investment & Securities, said, “It is still difficult to place weight on either path,” adding, “Whether AI capital expenditures (Capex) will continue to increase and whether memory supply-demand and margins will hold even after new fabs (manufacturing plants) come online are the key.”

On the other hand, some argue that the recent weakness in the domestic market is temporary ‘noise’. They hold a positive outlook that the rally driven by strong semiconductor earnings will continue, keeping the domestic market on an upward trajectory.

Lee Kyung-min, an analyst at Daishin Securities, said, “Amid the sharp decline in the domestic market, concerns have been raised about a slowdown and weakening of fundamental momentum, but the likelihood of that materializing is limited,” adding, “Rather, we are seeing favorable fundamentals (earnings improvement, upward revisions to forecasts, upward revisions to gross domestic product growth, etc.) becoming visible.”

Lee said, “It remains a market driven by earnings and macro factors,” adding, “In the second-quarter earnings season in particular, we expect strong results not only for semiconductors but also for sectors excluding semiconductors and for exporters.”

Kim Dong-won, an analyst at KB Securities, also said, “AI concerns are judged to be nothing more than noise,” adding, “Global AI investment is expected to expand from $390 billion in 2025 to $1.1 trillion in 2027, implying roughly a threefold increase in two years.”

He said, “In particular, the share of memory semiconductors in AI infrastructure investment is estimated to surge from 14% in 2025 to 50% in 2027,” adding, “The semiconductor rally is judged not to be over yet.”

Lee Jae-won, an analyst at Yuanta Securities, also said, “There is insufficient basis to conclude that the memory cycle has ended,” adding, “To argue oversupply, one would need to confirm an actual slowdown in the pace of capacity additions and inventory accumulation by customers, but what is currently being confirmed is, rather, a deepening of supply shortages.”