US, Seoul markets down over Nvidia's underwhelming earnings result

Seoul, Aug 29
South Korean shares dropped more than 1 per cent after opening on Thursday, taking a cue from Wall Street losses prompted by an underwhelming earnings result by global artificial intelligence (AI) chip giant Nvidia.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 31.62 points, or 1.18 per cent, to 2,658.21 in the first 15 minutes of trading, Yonhap news agency reported.

Overnight in the United States, the Dow Jones Industrial Average fell 0.39 per cent, with the S&P 500 losing 0.6 per cent. The tech-heavy Nasdaq composite slipped 1.12 per cent higher as well.

The Wall Street lost ground as Nvidia's closely followed second-quarter earnings result failed to impress investors, despite having beaten market expectations.

In Seoul, Samsung Electronics and chip rival SK hynix plunged 3.27 per cent and 6.36 per cent, respectively.

Energy shares also extended losses from the previous session. Leading refiner SK Innovation shed 0.37 per cent, and S-Oil fell 0.16 per cent.

Top automaker Hyundai Motor, meanwhile, added 1.74 per cent following the company's new mid- to long-term business strategy announced the previous day. Affiliate Kia also gained 0.86 per cent.

The local currency was trading at 1,338.15 won against the US dollar, up 0.85 won from the previous session.

AI chip giant Nvidia reported $30 billion revenue for the second quarter ended July 28, up 15 per cent from the previous quarter and up 122 per cent from a year ago.

However, the firm's shares fell after the announcement as analysts said it was less about just beating estimates as markets expect the company to perform even better.

“Hopper demand remains strong, and the anticipation for Blackwell is incredible,” said Jensen Huang, founder and CEO of Nvidia. “Nvidia achieved record revenues as global data centres are in full throttle to modernise the entire computing stack with accelerated computing and generative AI.”

During the first half of fiscal 2025, Nvidia returned $15.4 billion to shareholders in the form of shares repurchased and cash dividends.