Gaon Cable is experiencing strong gains in early trading, attributed to perceptions that concerns over increased regulations for artificial intelligence (AI) data centers in the U.S. are exaggerated.
As of 10:56 a.m. on the Korea Exchange, Gaon Cable's stock has risen by 27,750 won (15.77%) to 203,750 won compared to the previous trading day.
The surge in Gaon Cable's stock appears to be linked to a reduction in fears regarding a slowdown in investments in AI data centers in the U.S. The company is expanding its business in power cables and transmission networks for AI data centers, particularly through its U.S. subsidiary, LSCUS.
According to a report from Reuters the previous day, Morgan Stanley and UBS assessed that the recent sell-off in AI-related stocks was excessive. They noted that the market has overly reflected the possibility of stringent regulations from a Democrat-led Congress on data center development. Consequently, the Nasdaq Composite Index rose by 2.74%, indicating improved investor sentiment, particularly in technology stocks.
Morgan Stanley projected that regulatory enhancements could delay some data center projects from 2028 to 2029. However, they also suggested that if investment timelines are staggered, the AI investment cycle could extend, alleviating supply-demand imbalances in the data center supply chain.
UBS commented that the market is overly pessimistic regarding political risks, credit risks, and capital expenditure burdens surrounding AI. HSBC also indicated that following last week's stock declines, they are increasing their equity investment focus on U.S. and Asian technology stocks.
Seo Sang-young, a managing director at Mirae Asset Securities, stated, "Morgan Stanley, UBS, and Jefferies have evaluated concerns over a slowdown in AI investments due to data center regulations as excessive," adding that the easing of fears regarding AI investment reductions and ongoing expectations for capital expenditures have led to gains in semiconductor equipment and optical communication stocks on the New York Stock Exchange.
As of 10:56 a.m. on the Korea Exchange, Gaon Cable's stock has risen by 27,750 won (15.77%) to 203,750 won compared to the previous trading day.
The surge in Gaon Cable's stock appears to be linked to a reduction in fears regarding a slowdown in investments in AI data centers in the U.S. The company is expanding its business in power cables and transmission networks for AI data centers, particularly through its U.S. subsidiary, LSCUS.
According to a report from Reuters the previous day, Morgan Stanley and UBS assessed that the recent sell-off in AI-related stocks was excessive. They noted that the market has overly reflected the possibility of stringent regulations from a Democrat-led Congress on data center development. Consequently, the Nasdaq Composite Index rose by 2.74%, indicating improved investor sentiment, particularly in technology stocks.
Morgan Stanley projected that regulatory enhancements could delay some data center projects from 2028 to 2029. However, they also suggested that if investment timelines are staggered, the AI investment cycle could extend, alleviating supply-demand imbalances in the data center supply chain.
UBS commented that the market is overly pessimistic regarding political risks, credit risks, and capital expenditure burdens surrounding AI. HSBC also indicated that following last week's stock declines, they are increasing their equity investment focus on U.S. and Asian technology stocks.
Seo Sang-young, a managing director at Mirae Asset Securities, stated, "Morgan Stanley, UBS, and Jefferies have evaluated concerns over a slowdown in AI investments due to data center regulations as excessive," adding that the easing of fears regarding AI investment reductions and ongoing expectations for capital expenditures have led to gains in semiconductor equipment and optical communication stocks on the New York Stock Exchange.
* This article has been translated by AI.
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