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Global stock prices soar back of innovation

Posted February. 24, 2024 08:01,   

Updated February. 24, 2024 08:01


Nvidia, a leading U.S. semiconductor firm commanding 80% of the artificial intelligence (AI) semiconductor market, is making waves across the global stock market with its remarkable performance. The U.S. stock market has hit unprecedented highs, and its influence has catapulted stock markets in Japan, Europe, and Taiwan to record levels. Yet, in the midst of this worldwide stock market surge, driven by advancements in AI, the Korean stock market remains stagnant, stuck at levels not seen in six years.

On Thursday, the Dow Jones Industrial Average in New York shattered records by crossing the 39,000 threshold for the first time, buoyed by Nvidia's earnings report that significantly outperformed analysts' forecasts. Nvidia's shares leaped by 16.4% in just one day, bringing its market valuation close to the $2 trillion mark. In Japan, the Nikkei Index soared its highest point in over 34 years, eclipsing pre-asset bubble burst levels. Meanwhile, the Taiwan TAIEX Index and the pan-European Stoxx 600 Index are continually breaking new ground.

A group of elite companies dubbed the 'Magnificent Seven,' are charting a new course for the U.S. stock market. Tech giants such as Microsoft and Alphabet are at the forefront of the AI revolution, with Nvidia and its rival AMD, leading the charge in AI semiconductors, enjoying the spoils and energizing the market. In Japan, a collective known as the 'Samurai 7,' which includes semiconductor equipment manufacturers including Tokyo Electron, is reaping the benefits of the AI revolution. The Taiwanese stock market is buoyed by TSMC, the sole producer of Nvidia semiconductors, while in Europe, semiconductor design frontrunner ARM from the U.K. and Dutch semiconductor lithography equipment maker ASML are pushing stock prices upward.

Conversely, the Korean stock market is seeing limited gains from the AI surge. Although SK hynix, a supplier of High Bandwidth Memory (HBM) to Nvidia, has hit record highs, it falls short of driving the broader market. The AI prowess of Korean firms such as Samsung Electronics, Naver, and Kakao is deemed to be at a mere 47 out of 100 when compared to the U.S. Furthermore, battery manufacturers, once seen as the next pillar of growth, are now weighing down on stock prices amid a slump in the electric vehicle sector.

The stellar performance of stock markets in the U.S. and other leading nations stems from global investors gravitating towards companies with a clear vision for the future. Without demonstrating their value at the core of the Fourth Industrial Revolution, Korean companies' efforts to stimulate stock prices may prove futile. This underscores the imperative for businesses and the government to invest all available resources in securing a dominant position in the field of innovation.