[R&E] AI Infrastructure Bottlenecks and Energy Transition Suggest a Reorganization of the Market's Growth Axes

[R&E: Research & Epoch] This is News Epoch's signature report that provides a perspective on the new era of investment by comprehensively analyzing global financial data and domestic securities firm research.

Global Market Brief

Last Friday (05/22), the New York stock market saw the Dow Jones Industrial Average rise by 0.58%, hitting a new all-time high. The S&P 500 index also climbed 0.37%, continuing its upward streak for 8 consecutive weeks. The NASDAQ Composite (0.19%↑) and the Philadelphia Semiconductor Index (1.99%↑) also showed solid trends. This suggests that solid corporate earnings and expectations for artificial intelligence (AI)-related growth drove the overall market rally. The Volatility Index (VIX) dropped 3.9% to 16.8p, revealing that investor sentiment has stabilized.

However, macroeconomic indicators sent mixed signals. The University of Michigan's Consumer Sentiment Index, released last Friday, contracted to 44.8 compared to the previous month (49.8). In particular, 1-year inflation expectations rose to 4.8% from the previous month (4.7%), and 5-year inflation expectations also climbed to 3.9%. This shows that inflationary pressures persist, negatively impacting consumer sentiment. Meanwhile, oil prices dropped 5% last Friday, and US and European natural gas prices also fell in the 3% range. This reflects concerns over slowing energy demand or expectations of increased supply.

The US administration announced a total investment of $2 billion in quantum computing initiatives, of which $1 billion will be injected into IBM (NYSE: IBM). Following this news, related tech stocks showed strength, with Rigetti Computing (NASDAQ: RGTI) surging 19.87%. This suggests that government-level support for next-generation computing technology could provide a new growth engine. The KRW/USD exchange rate closed at 1,511.1 won last Friday, up 3.1 won from the previous trading day. Today (Monday, 05/25) is Memorial Day in the US, so the New York stock market is closed and will reopen on the next trading day (Tuesday, 05/26).

Domestic Market Overview

Last Friday (05/22), the domestic stock market saw the KOSPI rise by 0.41% to 7,847.71pt. The KOSDAQ index recorded 1,161.13pt, up 4.99%, triggering a buy sidecar. This reveals short-term overheating in the KOSDAQ market. Notably, Ecopro (KOSDAQ: 086520) surged 12.9%, leading the market rally, but Samsung Electronics (KRX: 005930) fell 2.34% despite starting at a new high, suggesting profit-taking pressure.

The transaction volume in the domestic stock market continues to break record highs. The 600 billion won 'National Participation Growth Fund' launched last Friday sold out in just 30 minutes, proving that retail investors' liquidity remains abundant. In the domestic government bond market, the 3-year yield fell by 0.9bp to 3.746%, and the 10-year yield also fell by 4.6bp to 4.136%. This shows that expectations for an interest rate cut have been partially reflected in the domestic bond market.

Today (Monday, 05/25), the domestic stock market is closed for the alternative holiday of Buddha's Birthday. Market trends will draw attention after reopening on the next trading day (Tuesday, 05/26). In particular, on May 27, 16 types of ±2x leverage products for single stocks of Samsung Electronics and SK hynix (KRX: 000660) are scheduled to be launched in the domestic stock market. These products provide 200% exposure by combining spot and futures or utilizing futures alone. This reflects the expansion of the domestic derivatives market as well as investors' demand for high-volatility products.

Key Industry Issues and Insights

The growth of the artificial intelligence (AI) infrastructure market is expanding its bottlenecks beyond securing Graphics Processing Units (GPUs) into power supply and heat management infrastructure within data centers. Accordingly, related demand for liquid cooling equipment, power distribution units, power connection components, and server protection equipment is expanding simultaneously. nVent Electric (NYSE: NVT), a company providing power connection and protection as well as liquid cooling solutions, saw its Q1 revenue increase by 54% year-over-year and Non-GAAP EPS increase by 63%, expanding its AI-related revenue share to 56%. This shows that power and cooling solutions for AI data centers are emerging as new growth engines. The company launched AI server rack response solutions based on NVIDIA's (NASDAQ: NVDA) GB200 and GB300, and is expanding its growth areas into power switchgear and modular electrical rooms through the operation of its new Blaine plant and the acquisitions of EPG and Trachte.

China's major semiconductor company, CXMT, is the top company in the Chinese DRAM market and has resumed the review for its Initial Public Offering (IPO) on the STAR Market. This reveals the Chinese government's intention to show a more active movement in fostering its domestic semiconductor industry and to expand its influence over the global semiconductor supply chain. Alibaba (HKG: 9988) announced its next-generation AI chip, T-Head, while NVIDIA stated that AI infrastructure demand remains solid and that it is expanding its growth axes into CPUs and networking. Alphabet (NASDAQ: GOOGL) materialized its transition to an AI Agent platform at Google I/O 2026. Thus, global big tech companies are intensifying their competition to secure dominance in AI technology.

In the aviation industry, the advancement of ultra-low-cost carriers stands out. Europe's largest ultra-low-cost carrier, Ryanair (NASDAQ: RYA.ID), recorded an FY 2026 (April 2025 - March 2026) revenue of 15.54 billion euros, an 11% increase year-over-year, and an operating profit of 2.37 billion euros, a 52% increase. The operating profit margin achieved 15.3%, improved by 4.1%p. This means that despite a 10% increase in average fares, the company succeeded in cost efficiency by limiting the unit cost increase rate to 1%. Even as competing airlines reduced Q2 flights by 5-6%, Ryanair maintained a 4% growth in operations, expanding its market share. A net cash flow of 2.1 billion euros and a debt-to-equity ratio of 95% suggest that its financial soundness is also solid.

In the automotive industry, new strategic changes are observed during the electric vehicle transition process. Ford (NYSE: F) announced that it will liquidate its agreement for BlueOval SK, the battery joint venture with SK On, and fully convert its existing Kentucky battery plant into a Battery Energy Storage System (BESS) production base. This is interpreted as a strategic decision to expand its business model into energy storage solutions in response to the slowing demand for EV batteries. Meanwhile, Qualcomm (NASDAQ: QCOM) announced an expansion of its multi-year collaboration with Stellantis (NYSE: STLA) for next-generation vehicle development, strengthening its position in the automotive electronics components market.

The domestic and overseas energy and chemical industries are showing complex trends. South Korea possesses the world's 5th largest refining capacity, while in China, the profitability of coal chemicals and ethylene crackers has improved, along with an increase in export volumes of PE, MEG, and PVC/caustic soda during March and April. This suggests that China's production expansion is impacting the global supply chain. US solar module prices have started to rise. Domestically, S-Oil (KRX: 010950), Kumho Petrochemical (KRX: 011780), and Hanwha Solutions (KRX: 009830) were selected as promising stocks. In particular, Kumho Petrochemical maintained solid margins for NBL and SBR/BR despite a drop in BD (butadiene) prices. This shows that the diversification of its product portfolio and efficient cost management have enhanced its defensiveness against economic fluctuations.

Market Signals

• The KOSDAQ rose by 4.99% last Friday, triggering a buy sidecar. This indicates a phenomenon where short-term liquidity is concentrating on a specific growth stock sector.

• Following the news of the US government's $2 billion investment in quantum computing, Rigetti Computing surged 19.87%. This reveals that next-generation technology policy support directly impacts the stock prices of related companies.

• Ryanair recorded an FY2026 operating profit of 2.37 billion euros, a 52% increase, expanding its market share amid competitors' flight reductions. This shows the capacity for profitability improvement of ultra-low-cost carriers through efficient cost control and fare increases.

• nVent Electric saw its Q1 revenue increase by 54% year-over-year, proving the growth of the AI data center power and cooling solution market.

• Ford announced that it would liquidate its battery agreement with SK On and convert its Kentucky plant into a BESS production base, surging 9.22%. This suggests a trend where automakers are diversifying their battery supply chain strategies and expanding into the energy storage market.

Epoch View: Investment Implications

The global economy is forming new growth axes amidst two megatrends: artificial intelligence (AI) and the energy transition. AI infrastructure expansion creates new bottlenecks and investment opportunities in power efficiency and cooling technologies beyond simple GPU demand. The advancement of power and cooling solution companies like nVent Electric, as well as the rise of Bloom Energy and the Korean fuel cell value chain, reveal that building sustainable infrastructure in the AI era is a key challenge. Meanwhile, Ryanair's outstanding performance and Ford's battery plant conversion prove that strengthening efficiency and securing strategic flexibility within traditional industries are crucial factors determining a company's survival and growth. The domestic stock market requires investors' careful analysis and caution as it faces short-term overheating in the KOSDAQ market and the impending launch of high-volatility derivative products.

This content was generated through News Epoch's proprietary AI algorithm, which tracks and analyzes public data from major domestic securities firm research centers and global financial media in real time.