NEW YORK: Nvidia Corp chief executive officer Jensen Huang calls a global tech stocks sell-off that began last week a buying opportunity, adding that he buildout of artificial intelligence (AI) has just begun.
South Korea’s benchmark Kospi Index tumbled yesterday after investors pulled back from AI bets that have fuelled a bull market in global equities.
Fears of overheating in the AI trade have cooled global tech stocks, with US peers tumbling last Friday on concerns over a possible rate hike.
Huang, responding to questions about how that sell-off should be perceived, said the industry was still in the early stages of constructing infrastructure that will serve as the foundation of an AI-fuelled future.
Yesterday, Nvidia and SK Hynix Inc said they struck a multi-year agreement to design future generations of memory chips for AI, a win for a South Korean leader vying with Samsung Electronics Co in the red-hot arena.
Stocks, including SK Hynix, pared losses after South Korean President Lee Jae Myung said yesterday he believed the domestic market remained undervalued.
“We’re at the beginning of it, and whatever happened to the stock market, you should be very happy because now you can buy at a discount,” the South Korean president added.
“Everybody should be very excited,” he told reporters after meeting with SK Group chairman Chey Tae-won in Seoul.
Like many of his industry peers, Huang has consistently argued that AI will revolutionise broad swaths of the global economy and transform the way people work and live.
That will in turn drive huge demand for the data centres, and chips, needed to power future AI services.
“It is a foregone conclusion that AI will be infrastructure for the world, just like the Internet was infrastructure for the world,” he said.
Meanwhile Timothy Moe, Goldman Sachs chief Asia-Pacific regional equity strategist expects South Korean stocks to bounce back after the drop that triggered a circuit breaker, Bloomberg reported separately.
“In the longer run, this will prove to be a technical correction, albeit a scary one in a longer-term bull market,” Moe said, adding that “the underlying fundamentals are still very, very strong”.
He said there were some signs that speculative activity increased, particularly for retail investors in South Korea, and especially moving into some leveraged exchange-traded funds.
“What we’re seeing is an unwind of some of that accumulation amplified by the leverage.”
Goldman last week raised its outlook for South Korean and Taiwanese stocks on expectations the AI boom will drive profits in the tech-heavy markets.
Moe said yesterday that valuations in South Korean equities are very reasonable and expects underlying profits to continue to drive growth. — Bloomberg
