KOSPI to hit fresh record highs in next 6-12 months: Wall Street analyst
Dan Ives, a partner and senior managing director at Yorkville Ives, speaks during a press conference at Conrad Seoul, Wednesday. Courtesy of Yorkville Ives
Ives dismisses AI bubble concerns, says revolution is 'less than 15%' complete
The KOSPI will likely hit fresh all-time highs over the next six to 12 months, as Korean stocks have been oversold amid broader investor concerns about artificial intelligence (AI), veteran Wall Street analyst Dan Ives said Wednesday.
"Memory is the heart and lungs of the AI revolution," Ives, a partner and senior managing director at Yorkville Ives, said during a press conference in Seoul. "It just creates an opportunity to own these stocks when irrationality hits the market, which I think is what's happening right now here in Korea."
Ives, who has 25 years of experience as a Wall Street technology analyst, said the foreign investor sell-off in shares of Samsung Electronics and SK hynix is nearing an end.
Foreign investors were net sellers of 199.1 trillion won ($148.9 billion) worth of KOSPI-listed shares this year through Monday, with Samsung Electronics and SK hynix accounting for 173.2 trillion won, or 87 percent of the total, according to the Korea Exchange.
He said there is a significant disconnect between the companies' fundamentals and their share prices, as the memory chip market is not expected to reach equilibrium until early 2029. SK hynix remains his top technology stock pick this year.
Addressing concerns over capacity expansion by Chinese memory chipmakers, including CXMT, Ives dismissed the threat as a "fictional narrative," arguing that Korea is at least three years ahead of China technologically.
"I'm not saying that China can't narrow the gap and they'll ultimately come up with competitive solutions but these worries about China being some sort of negative trojan horse for Korean memory is way overdone," he added.
Ives expressed strong optimism over technology stocks, saying the AI revolution is "less than 15 percent" complete. He predicted that the Nasdaq could reach 30,000 and eventually 35,000, dismissing concerns about an AI bubble.
"In 1999, the average tech stock was trading at 30 times revenues ... all venture funded with business models that were in PowerPoint presentations and didn't have true use cases," Ives said.
By comparison, he said, tech stocks today trade at 23 times earnings. Major technology companies have a combined $1 trillion on their balance sheets, generate $300 billion to $400 billion annually, and are seeing AI use cases multiply rapidly.
Ives also downplayed concerns over potential AI regulation. He said the industry would likely rely more on self-regulation, warning that excessive government regulation could benefit China at the expense of the U.S.
Looking ahead to 2027, Ives identified Nvidia, Microsoft, Palantir, Apple and CrowdStrike as his top five technology stock picks, with price targets of $300, $615, $250, $400 and $335, respectively, implying upside potential ranging from 17 percent to 32 percent.
Turning back to Korea, Ives said the country's contributions to the AI revolution had long been underappreciated. He expects Korea's technology industry to expand beyond memory chips into AI models, software, infrastructure and energy over the next decade. He spoke positively about Hyundai Motor and Hanwha.
"The Korean market today reminds me of Silicon Valley in the mid-1990s," he said, describing Korea as "a new frontier for technology globally."