South Korea’s stock market is breaking records at a breakneck pace. On Wednesday, the country’s benchmark Kospi Index jumped 2.6% to reach an all-time high of 6,123. This milestone comes just a month after the index crossed the 5,000 mark for the first time, proving that the global demand for artificial intelligence hardware is reshaping the financial landscape.
The rally is largely powered by the country’s two tech giants, Samsung Electronics and SK Hynix. Both companies saw their share prices climb more than 2% on Wednesday. As major suppliers of the memory chips needed for AI computing, they have become magnets for foreign investment. With the Kospi now up 45% in 2026 alone, South Korea’s total stock market value has climbed to $3.76 trillion, officially surpassing France’s market capitalization just weeks after overtaking Germany.
For years, global investors overlooked Korean stocks, often considering them undervalued compared to other markets. That dynamic has flipped. The so-called “AI scare trade” has actually helped South Korea. While software companies elsewhere face uncertainty, Korea’s hardware-heavy market offers the physical components that power the AI revolution.
Recent legal news from the United States also provided a boost. The US Supreme Court struck down President Donald Trump’s attempts to impose reciprocal tariffs last week. Analysts believe this decision removes a major layer of uncertainty for Korean exporters who rely on American consumer demand for electronics. Additionally, upcoming corporate governance reforms, including a bill that would require companies to cancel treasury shares, are making the market more attractive to investors.
The rally gained extra momentum following news that Meta Platforms struck a deal to buy chips from AMD. This signaled that the appetite for tech hardware remains insatiable.
However, some experts advise caution. Jung In Yun, CEO of Fibonacci Asset Management Global, noted that future gains might be slower. He warned that for the rally to last, earnings need to remain strong, and growth must spread beyond just a few semiconductor heavyweights. Despite these concerns, early signs suggest that Korean retail investors, who traditionally bought US stocks, are starting to bring their money back home.
