Samsung Electronics and SK Hynix rebounded more than 2% on Friday, recovering some ground after Thursday's violent tech sell-off, but the bounce does little to resolve how investors should value the AI memory trade.
Both stocks climbed in early trading after plunging 9.48% and 11.06% respectively on Thursday. The KOSPI index had fallen 7.57% to 5,554.22, a six-month low, and briefly triggered a circuit breaker before the reversal.
The rebound reflects bargain hunting after seven consecutive sessions of declines, but it also exposes a deeper tension in the market. Memory fundamentals remain strong, yet investors are increasingly treating AI hardware as a cyclical trade rather than a structural growth story.
Rebound after panic selling
Thursday's collapse was severe enough to set up a technical bounce. Foreign investors sold about 3.6 trillion won of Korean shares as hotter US inflation and doubts over AI spending triggered broad risk reduction.
Kiwoom Securities analyst Han Ji-young noted that past episodes of large cumulative declines over seven sessions were often followed by short-term retracements. “Prices have tended to retrace in the short term,” he said, according to Seoul Economic Daily.
That supports the idea that Friday's rebound may initially reflect positioning rather than a fundamental change. The reasons behind Thursday's sell-off remain: high borrowing costs still threaten AI infrastructure financing, Chinese memory maker CXMT is advancing its technology, and investors question whether hyperscalers can earn enough from AI to justify spending.
Valuation reset for memory stocks
The bigger debate is whether Samsung and SK Hynix still deserve AI-growth valuations. Their operating backdrop remains strong. TSMC said Thursday that AI demand was “extremely robust” and exceeded supply, while TrendForce data showed DDR5 spot prices continuing to rise.
Yet investors have compressed semiconductor valuations aggressively. KB Securities analyst Mingyu Kim wrote that “concerns over the sustainability of AI investment beyond the next 12 months” had pushed markets back toward valuing semiconductor companies as commodity-driven cyclicals, according to Business Insider.
That shift matters because memory companies have lived through sharp pricing and margin cycles. During the AI boom, scarcity in DRAM and high-bandwidth memory encouraged investors to assume structurally higher earnings. Now financing stress, CXMT competition and uncertainty over AI returns are reviving the old question of how much of today's profitability is temporary.
AI spending remains the decisive test
The next leg depends on customers buying the chips. Meritz Securities research chief Lee Jin-woo said unresolved concerns over AI profitability had pushed the market into “a kind of panic”. He argued that strong big-tech earnings and guidance would be needed to remove uncertainty around investment.
That is crucial for Samsung and SK Hynix, as their near-term memory demand can remain exceptional while their shares struggle if investors believe hyperscalers will eventually slow capital spending. TSMC's latest results support the bullish side. Third-quarter profit rose 69% to a record, and the company said demand continues to exceed capacity.
But management also said it was being prudent about 2027 because of macroeconomic uncertainty. Foreign flows remain another warning, as overseas investors had sold more than 12 trillion won of Korean equities in October before Thursday's rout.
This article is for informational purposes only and does not constitute financial advice.
