Nvidia's logo is displayed at its office building in Santa Clara, California., May 31, 2023. AP-Yonhap
Investors in Korea, who were actively buying Nvidia stocks in the first half of this year, have shifted to aggressive selling in the second half amid growing concerns that the monetization of the artificial intelligence (AI) industry might be delayed compared to initial expectations.
According to the Korea Securities Depository, Friday, the amount of Nvidia stocks held by Koreans stood at 14.51 trillion won ($10.6 billion) as of Tuesday.
On July 10, when Nvidia's stock price was approaching its 52-week high, Koreans held 19.19 trillion won worth of the company's shares. This figure reflects a decrease of nearly 5 trillion won in their holdings in less than a month.
In the second half, up until Thursday, Korean investors sold 867.6 billion won worth of Nvidia stocks. This contrasts sharply with the first half when they aggressively purchased around 2.45 trillion won worth of the shares.
During the first six months of this year, Nvidia stocks were the most popular among Korean investors, with purchases nearly 1 trillion won higher than those of Tesla stocks, which were the second most popular.
The recent selling trend of Nvidia stocks is attributed to a roughly 30 percent decline in the stock price over the past month.
On June 20, the stock price of the tech firm surged to $140.76, reaching a new 52-week high driven by the AI semiconductor boom. By July 10, the stock price was $134.91, nearing the 52-week high. However, it has since been on a downward trajectory.
Nvidia supplies AI chips almost exclusively to major U.S. tech companies. But recently, these firms have reported earnings that fell short of expectations, leading to growing market skepticism about whether the AI industry can generate substantial profits. This also resulted in a sharp decline in Nvidia's stock price, according to market experts.
Microsoft's revenue for the quarter ending June 30 reached $64.77 billion, up 15 percent from a year earlier, surpassing market expectations. However, Intelligent Cloud, its core business segment, generated $28.5 billion in sales, missing market expectations by $140 million.
Ongoing investigations by the U.S. Department of Justice into potential antitrust violations by Nvidia also weigh on the company.
The AI chip giant is expected to announce its latest earnings on Aug. 28. Experts said if the numbers exceed market expectations and provide a positive outlook for the next quarter, it could help alleviate some concerns about excessive investments in AI.
"Nvidia has been one of the biggest beneficiaries of the growth in AI technology and potential market expansion," Hana Securities analyst Lee Jae-man said.
"However, concerns over the yen-carry trade (borrowing yen at low interest rates in Japan to invest in other assets) and growing fears of an economic downturn are likely to lead to a period of high market volatility."