Warning of "Severe Shock from Jensen Huang Bubble": Are Retail Investors Facing a "Boomerang"?

Foreign media outlets have warned that Nvidia CEO Jensen Huang's market intervention is inflating the AI bubble.

The British economic weekly The Economist reported, "CEO Jensen Huang is intervening in the market like a central bank by funding the AI ecosystem," adding, "The South Korean stock market could be the first to take a hit."

It further pointed out, "The deeper CEO Huang's intervention gets, the more severe the shock will be when the bubble bursts."

In particular, The Economist highlighted the recent sharp declines in the stock prices of Samsung Electronics and SK Hynix as a precursor to the collapse of the global stock market bubble.

The analysis noted that growing concerns over a so-called "peak-out," suggesting that memory chip prices have reached their peak, dragged down the stock prices of the two leading shares.

The Economist identified structural vulnerabilities within the South Korean market as a major driver fueling stock market instability.

It directly criticized South Korea as "a giant experimental lab combining the extremes of state capitalism and market speculation."

It explained that following the martial law crisis, government efforts to boost the stock market sparked a retail investment frenzy. This, combined with individual stock leverage ETFs permitted in late May, triggered a vicious cycle of massive forced liquidation and account closures during stock declines, thereby maximizing market volatility.

It further diagnosed that even if the two semiconductor giants rake in massive cash, a structure where profits are concentrated only in specific stages of the supply chain is difficult to sustain for long.

It also presented fierce chasing by Chinese memory makers and the potential defection from long-term contracts during a future economic downturn as core risk factors to watch out for.

Bloomberg News also warned on July 30 that "the recent Kospi decline is just the tip of a giant iceberg" and that "concerns surrounding the AI industry could spread beyond South Korea to the rest of the world."

(Reported by Lee Hyeon-yeong | Video by Seo Byeong-wuk | Graphics by Yook Do-hyun | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.