Korean securities firms identified power equipment stocks as the next major investment theme following AI semiconductor stocks on the 27th, citing rising power demand from AI data center expansion and recent price corrections that reduced valuation concerns. Mirae Asset Securities, KB Securities, Eugene Investment Securities, and LS Securities projected that transformers, distribution equipment, and energy storage systems will experience profit growth driven by mid- to long-term power infrastructure needs. This shift occurs as power equipment stocks have undergone corrections since May while maintaining strong earnings outlooks, with US Big Tech earnings announcements serving as a key catalyst for the sector's direction.
Hwang Sung-hyun, researcher at Eugene Investment Securities, stated that AI competition is no longer determined solely by GPU performance, and that the ability to secure affordable and stable power will become core competitiveness determining data center investment costs and AI service expenses. The upcoming earnings announcements from Microsoft, Meta, Alphabet, and Amazon are identified as critical variables, as maintained or expanded AI data center investment plans could raise order expectations for transformer, circuit breaker, and distribution panel manufacturers.
Analysts Highlight Earnings Strength Amid Stock Price Corrections
Power equipment stocks have shown relative underperformance compared to AI semiconductor stocks in recent price movements, attributed to valuation burden higher than global competitors and investor attention shifting to IT hardware. Securities firms are focusing on this divergence between price corrections and earnings outlooks, advising investors to view the current situation as a buying opportunity.
Kim Min-gyu, researcher at KB Securities, noted that power equipment stocks played a secondary role following semiconductors in the AI investment cycle, but their price trends diverged from semiconductor stocks starting in May. He assessed that upward revisions to overseas companies' earnings outlooks suggest possibilities for estimate increases or earnings surprises when domestic power equipment companies announce second-quarter results.
Sung Jong-hwa, researcher at LS Securities, stated that the current power equipment industry conditions should be viewed as a long-term growth phase combining energy transition and AI investment rather than short-term economic cycles, adding that this provides some validity for applying higher valuations than in the past.
Securities Firms Recommend Mid-Cap Power Equipment and Power Semiconductor Stocks
Investment strategy recommendations are shifting from simple追 purchases of large-cap stocks to discovering secondary stocks with significant valuation gaps. Park Hee-chul, researcher at Kyobo Securities, explained that the power equipment industry's structure makes it difficult for supply to rapidly increase in line with demand growth, meaning leading companies' order backlog saturation will spread opportunities across the value chain. He stated that as global major companies face longer delivery times and supply chain diversification needs grow, mid-sized companies with verified technology can enter new markets or increase market share.
Park Ki-hyun, researcher at Kiwoom Securities, analyzed that AI server power consumption surges will accelerate the transition to 800-volt high-voltage power systems, suggesting that high-value component manufacturers including silicon carbide (SiC) and gallium nitride (GaN)-based power semiconductors and power management chips may emerge as new beneficiary stocks.
FAQ
What did Korean securities firms identify as the next major stocks on the 27th?
Korean securities firms including Mirae Asset Securities, KB Securities, Eugene Investment Securities, and LS Securities identified power equipment stocks as the next major investment theme following AI semiconductor stocks, citing rising power demand from AI data center expansion and recent price corrections that reduced valuation concerns.
Why are US Big Tech earnings announcements considered important for power equipment stocks?
US Big Tech earnings announcements from Microsoft, Meta, Alphabet, and Amazon are identified as key variables because maintained or expanded AI data center investment plans could raise order expectations for transformer, circuit breaker, and distribution panel manufacturers, according to securities industry analysis.
