Samsung and SK Hynix get government endorsement worth $1.3 trillion from South Korea! Analysts: AI is a life-or-death battle for countries around the world.

South Korea's stock market opened lower today but closed higher. Samsung Electronics and SK Hynix's AI investment plan, valued at up to $1.3 trillion, received government backing in late trading, narrowing their stock price declines. Analyst degentrading believes this signals the early stages of global AI competition are arriving, with countries treating it as a battle for survival.

(Previous context: Jensen Huang's stock holdings list: $12 billion sweep of six stocks, INTC quadrupled to lead, Marvell is the "next trillion-dollar company"?)

(Background supplement: Oracle plunges 40%, will overbuilt AI infrastructure drag down giants?)

Table of Contents

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• Countries treating AI as a battle for survival
• Cloud vendors won't stop just because stock prices are discounted
• Compute and memory pooling

Key Takeaways

• South Korea announced today Samsung and SK Hynix's AI investment plan of up to $1.3 trillion, personally endorsed by the presidential office Cheong Wa Dae
• degentrading highlights two main themes: compute (led by Nebius) and memory pooling (ALAB, CRDO, MRVL)
• JPMorgan estimates quarter-end rebalancing in June could bring about $165 billion in selling pressure; degentrading still bullish on post-July market

South Korea's stock market staged a lower open and higher close today. In early trading, Samsung Electronics briefly plunged nearly 5%, and SK Hynix fell nearly 6%. By the close, the South Korean government personally endorsed the massive investment plans of the two chip giants, narrowing the declines.

Pre Mkt Thoughts – 29 Jun 26

Asia markets had some early jitters before coming back to almost unchanged. KOSPI, NKY both traded with very strong correlation, selling off early in the morning before inching back into the close.

Lets talk about the memory names. $285A had a dip…

— degentrading (@degentradingLSD) June 29, 2026

Countries treating AI as a battle for survival

Analyst degentrading posted an interpretation, directly reading South Korea's move as evidence of the early stages of global AI competition arriving. In his view, countries are already treating this competition as a battle for survival.

Regarding the event, South Korean President Lee Jae-myung's office held a briefing at Cheong Wa Dae today (6/29). Samsung Electronics and SK Hynix jointly unveiled a major AI semiconductor investment plan, with a range of 1,000 to 2,000 trillion won, equivalent to approximately $650 billion to $1.3 trillion. All funds will be poured into next-generation memory wafer fabs, AI data centers, and robotics, as part of the government's "three major super projects." Affected by a mix of profit-taking and news, the KOSPI fell more than 2% in early trading but narrowed losses by the close thanks to government backing.

degentrading's operational direction is more specific: over the next period, South Korea's small-cap stocks are more promising. For small capital, these may be among the best opportunities. When a country's government personally endorses capital expenditures for chip factories, this competition is not just run by companies—it's a national team stepping in directly.

Cloud vendors won't stop just because stock prices are discounted

Turning the lens back to the U.S. stock market, degentrading reminds of a short-term variable: institutional quarter-end rebalancing. He estimates that by the end of this month, about $165 billion worth of stocks will be sold.

This number has external corroboration. JPMorgan estimates that June quarter-end rebalancing could sell up to $165 billion in stocks into bonds. Among them, U.S. retirement funds managing about $9.6 trillion will sell roughly $55 billion, Japan's Government Pension Investment Fund (GPIF, about $1.9 trillion) will sell about $60 billion, and balanced funds will net buy about $15 billion as a partial offset.

Quarter-end rebalancing, simply put, is when institutions mechanically sell stocks and buy bonds each quarter to adjust their stock-bond ratios back to targets. It has little to do with fundamentals.

But degentrading believes the market after July is still worth looking forward to. Another of his judgments is that hyperscale cloud vendors won't stop capital expenditures anytime soon. Even if their stock prices are hit, they won't pull back because they already see the dawn of positive returns from their investments. The selling pressure is seasonal; capital expenditures are structural. degentrading is betting the latter outweighs the former.

Compute and Memory Pooling

The real focus is on stock selection. degentrading highlights two themes currently worth watching: one is compute (neos), the other is memory pooling. The compute line refers to neoclouds—the new generation of cloud GPU compute providers that specialize in renting out GPU clusters for AI training and inference. They are not the same as the traditional three major clouds.

On compute, degentrading believes NBIS (Nebius) has already become a leader. This neocloud headquartered in Amsterdam has seen its stock price rise about 221% year-to-date in 2026, with quarterly revenue up 684% year-over-year to $399 million. It holds contracts with Microsoft worth about $19.4 billion over five years and Meta for about $27 billion, with NVIDIA also directly investing. He also mentions SHAZ (SharonAI Holdings) as an interesting new player, possibly still being accumulated by Leopold Aschenbrenner's hedge fund Situational Awareness. This fund newly built a position of about 796k shares worth approximately $18.1 million in Q1 2026. SharonAI also completed a $1.6 billion oversubscribed private placement on 6/29, led by Situational Awareness.

On the memory pooling line, degentrading names targets including ALAB, CRDO, PENG, and MRVL. This technology involves decoupling memory resources from individual CPUs or GPUs, pooling them into a shared memory pool that multiple compute nodes can dynamically access on demand. The underlying layer mostly runs on CXL (Compute Express Link, an open standard that enables high-speed interconnection and sharing between CPU, GPU, and memory). Among them, Astera Labs (ALAB) makes CXL memory controllers and PCIe retimers, with 2025 revenue up 115% to $852.5 million; Credo (CRDO) makes active cables within AI clusters; Marvell (MRVL) had its price target raised to $350 by Stifel on 6/24.

On compute, Nebius has already become the leader, and SharonAI is an interesting new player; on memory pooling, we're watching ALAB, CRDO, PENG, and MRVL. Memory will remain strong, but the easy gains and valuation gaps are probably mostly filled.

In other words, degentrading is not telling everyone to blindly chase memory. He himself says memory will continue to be strong, but the easiest part of the rise and the valuation gap have been mostly filled. This list consists entirely of stocks that are still burning cash to expand, with valuations supported by AI narratives. When even the South Korean government steps in to endorse and cloud vendors grit their teeth without stopping, how this battle for survival will end will be answered by the market in the coming quarters.

Frequently Asked Questions

What is memory pooling?

Memory pooling is a technology that decouples memory resources from individual CPUs or GPUs and consolidates them into a shared memory pool, allowing multiple compute nodes to dynamically access and allocate memory on demand. The underlying layer mostly uses the CXL standard and is considered an important trend in AI computing infrastructure.

Why does quarter-end rebalancing cause stock selling pressure?

Institutions mechanically sell stocks and buy bonds each quarter to adjust their stock-bond ratios back to targets. JPMorgan estimates approximately $165 billion in stock selling pressure at the end of June 2026, mainly from U.S. pension funds and Japan's GPIF, which has little to do with corporate fundamentals.