Asger Risom
A major South Korean chipmaker is preparing for a blockbuster $29 billion U.S. listing following an explosive 800 percent stock rally, serving as the ultimate litmus test for the future of the AI market.
A major South Korean chipmaker is officially gearing up for its highly anticipated debut on the U.S. stock market.
Set to list on the Nasdaq this Friday, the blockbuster IPO is expected to raise a staggering $29 billion, potentially marking the largest first-time share sale ever executed by a foreign company.
According to a recent report from Fortune, the chipmaker’s overseas-listed stock has exploded by nearly 800 percent over the last 12 months, emerging as Nvidia’s favorite supplier and easily outpacing the 700 percent rally enjoyed by its fierce domestic rivals.
Raising alarms with historic market volatility
However, despite these astronomical gains, this imminent U.S. arrival is actively fueling severe concerns about the sustainability of the global artificial intelligence boom.
When the company recently hinted at plans to slow down its AI memory business, it triggered a massive shockwave that caused its local stock index to suffer its fifth-worst daily plunge in history.
Analyst James Reilly of Capital Economics pointed out that this specific brand of stomach-churning volatility is incredibly worrisome, as similar aggressive selloffs have historically only occurred during devastating bear markets like the dot-com bubble and the Great Financial Crisis.
Struggling to feed the trillion-dollar beast
Adding to the growing market anxiety is the fact that hyperscalers are burning through cash at an unprecedented rate, with infrastructure spending projected to hit an astonishing $1 trillion next year.
Because natural cash flow is no longer sufficient to fund this massive AI expansion, tech companies are increasingly forced to issue bonds and fresh stock to keep up with the insatiable demand.
To handle the historic surge, the chipmaker plans to pour hundreds of billions of dollars into two brand-new production plants, but Bank of America analysts warn this aggressive expansion could ultimately trigger a disastrous oversupply and a painful valuation snapback.
