Uncharted Path... 'AI Uncertainty' Shakes the Market

[Anchor]

Recently, the stock market has been led by the AI industry. Because this is a path never traveled before, whenever questions arose regarding investment and profitability, the market experienced sharp fluctuations.

Reporter Min Gyeongho analyzes what kind of question mark led to the steep decline this time.

[Reporter]

Experts explain that such high volatility is fundamentally because the world has never experienced an industry like AI before.

There is no way of knowing just how large the industry can grow or whether a cycle even exists.

However, falling behind means being left behind, so companies are busy investing regardless of profitability uncertainties.

[Christophe Fouquet / ASML CEO (December of last year): It is a kind of arms race. If you do not invest now, you get left behind.]

Consequently, the stock market, which weighs profitability, has fluctuated whenever concerns over investment scale and returns emerged.

This time, doubts were raised not just about individual AI companies, but at the level of a specific industrial sector.

While AI data center revenues need to reach 8.5 trillion dollars by 2030 to achieve target profits, a forecast emerged that they are likely to fall short at around 3.6 trillion dollars at best.

Market research firm Gartner specifically pointed to the neocloud industry.

It warned that 80 percent of this industry, which consists of cloud services specialized in AI model training and inference based on GPUs, may not survive.

The stock price of CoreWeave, a representative neocloud player, immediately dropped by 15 percent.

Whenever questions about profitability were raised in the past, big tech companies such as Microsoft, Amazon, and Micron provided answers based on their earnings, and stock prices rebounded.

Experts note that the essence of the doubts raised this time remains the same, and are focusing on the big tech earnings announcements that begin in earnest next week.

[Lee Jin-woo / Head of Research Center, Meritz Securities: Ultimately, those right at the center need to provide a solution once again. More specific explanations must reassure the market to overcome this, or else we will return to the same repetitive cycle.]

It is also worth noting what message will come out of the U.S. Federal Reserve's rate decision scheduled for the early hours of the 29th, our time.

Higher-than-expected September Consumer Price Index growth served as a major factor in the stock price decline, because additional interest rate hikes raise capital financing costs and ultimately worsen investment returns.

(Video Editing: Kim Jong-mi)
※ Please note: This article was translated by AI and may contain errors.