Korean chip stocks will win no matter who survives the AI giants' 'deathmatch': KB Financial Group

• Fundamentals and valuations of Korean chip stocks (Samsung, SK Hynix) remain intact, with valuations becoming cheaper due to earnings upgrades outpacing share price increases.
• The current rally in these semiconductor giants is 'not even halfway through,' with a good runway expected for at least a couple more years due to the memory shortage.
• Foreign investors' net selling of the KOSPI is primarily for risk management of oversized positions, not a bearish fundamental view on the chipmakers.
• Labor union actions, while present, are not expected to derail the sector rally, as the government is proactive in market reform and the unions are not traditional working-class movements.
• Korean semiconductor makers possess strategic options to navigate the 'AI dominance war,' benefiting regardless of which hyperscaler ultimately wins.

Peter Kim, Global Investment Strategist at KB Financial Group, believes the rally in South Korean semiconductor stocks, particularly Samsung and SK Hynix, is far from over. He highlights strong fundamentals, attractive valuations, and ongoing earnings upgrades as key drivers, despite recent foreign institutional selling and labor union concerns.