[Econ & Biz] Will Korean Stocks Continue Their Rally Even Though Index Has More Than...

Why It Matters

The rally highlights how AI‑centric demand is reshaping Korean equities, while the concentration in a few mega‑caps raises both upside potential and systemic risk for investors.

Key Takeaways

• KOSPI up 138% YoY, world’s top performer
• Samsung, SK Hynix, Hyundai drive rally
• Mega‑caps rose 285‑441% YoY
• Analysts target 7,300‑8,000 points, ~27% upside
• Concentration risk may trigger volatility

Pulse Analysis

The Korean stock market’s meteoric rise is anchored in the global AI supercycle, which has turned memory chips into a strategic commodity. Samsung Electronics and SK Hynix, the world’s leading DRAM and NAND producers, have captured unprecedented order flows from data‑center builders and generative‑AI platforms, translating into 285% and 441% revenue‑driven price gains. Hyundai Motor’s pivot toward robotics and autonomous‑driving partnerships with firms like NVIDIA further cements the country’s position at the intersection of semiconductor prowess and physical AI development.

This concentration mirrors the U.S. “Magnificent Seven” phenomenon, where a small cohort of technology giants dominates market breadth. While the outsized performance of Samsung, SK Hynix and Hyundai keeps the KOSPI buoyant, it also skews valuation metrics, making the index vulnerable to sector‑specific headwinds. Investors should monitor earnings quality, as the mega‑caps have, so far, delivered earnings growth that outpaces price appreciation, keeping price‑to‑earnings multiples relatively reasonable compared with global peers.

Looking ahead, brokerages such as Nomura and Hana project the index could reach 8,000 points, suggesting a further 27% upside. However, the same analysts flag short‑term correction risks tied to potential AI‑bubble narratives and broader market volatility. For portfolio managers, the key is balancing exposure to high‑growth AI‑linked equities with diversification strategies that mitigate the impact of a possible pullback in the mega‑cap segment.

Original Description

[Econ & Biz] Will Korean stocks continue their rally even though index has more than doubled in a year?

2년째 세계지수상승률 1위중인 코스피, 이미 1년간 138% 올랐는데 더 갈까?

South Korea’s benchmark KOSPI has more than doubled from a year ago.

In fact, it has been the world’s best-performing index for two straight years.

But after such a strong rally, are Korean stocks still a buy?

We turn to our economics correspondent Park Jun-han , who joins us in the studio.

Welcome back, Jun-han.

It's great to be back, Dami.

So, Jun-han, we know that the index has at least doubled.

Which stocks were the main drivers behind this remarkable rally?

Dami, the local market is experiencing a strong bull run.

The primary drivers have been a handful of powerhouse stocks in the semiconductor and automobile sectors.

Samsung Electronics and SK hynix have been the undisputed leaders, fueled by explosive demand for AI-related memory chips and the ongoing global AI supercycle.

These top two mega-caps alone have accounted for a disproportionate share of the gains, increasing 285% and 441% year-on-year, respectively.

Aside from those two, adding significant momentum was automotive giant Hyundai Motor, which jumped sharply on expectations of advancements in robotics and autonomous driving.

A company once considered a classic automaker is now valued as a key tech player in physical AI, partnering with global tech giants like NVIDIA to develop autonomous driving systems and Google DeepMind to advance humanoid robots.

As a result, Hyundai Motor also saw a remarkable 197% year-on-year increase.

With strong demand for AI chips and earnings that justify stock price growth, domestic and international securities firms have raised near-term targets to as high as 8,000.

Nomura Securities has set the most aggressive target, raising the upper band to 8,000 points.

That implies a near 27 percent upside from current levels.

Hana Securities is close behind with a target of 7,900.

Global investment bank JP Morgan sees the index reaching 7,500.

Kiwoom Securities and NH Investment & Securities have both lifted their projections to 7,300.

2. It seems like these few stocks are fueling the rise of the index.

But as you just mentioned, if not all stocks are going up, isn’t it concerning that only a few are disproportionately affecting it?

Sure, Dami.

The rally’s heavy reliance on just a few mega-caps does raise concerns.

But an expert claims that it is the mega-cap companies that have the money and technology to dominate the market, which is a universal phenomenon in many countries.

Let’s take a listen.

"There is a reason we keep referring to the U.S. Magnificent Seven. The nature of AI technology means the benefits do not easily spread to smaller companies. Without substantial capital, firms simply cannot compete in this AI game. That is why our top ten companies by market capitalization are, in effect, our national champions. For now, the priority is survival. Distribution can be discussed after they secure their position."

This dynamic helps explain why valuations continue to expand even as prices rise rapidly.

In some cases, earnings growth among market leaders has outpaced share price gains, keeping valuation multiples reasonable or even attractive relative to peers such as other global tech companies.

Capitalization is increasingly concentrated in companies that are advancing technology.

As more firms ramp up spending on AI, suppliers of essential components, such as Samsung and SK hynix, stand to benefit.

At the same time, companies like Hyundai, which possess both capital and technological capabilities to develop physical AI, are better positioned to attract top talent and accelerate innovation.

3. Last question for you, Jun-han.

What are some expectations and concerns we should keep in mind when investing?

First of all, to all our viewers, this is not financial advice.

Stock investments carry inherent volatility, and viewers should make decisions based on their own judgment.

For more about wise ways to invest, let’s take a listen to an analyst I spoke to.

"The biggest concern in the short term is that the market has risen quite sharply. Although concerns in the U.S. about an AI bubble or broader disruption have somewhat eased, if such narratives continue to resurface, they could inevitably weigh on stock prices."

Both analysts I spoke with while preparing this report expressed optimism about the future of the domestic stock market. However, they also cautioned that stocks can move in either direction, and volatility-driven corrections could occur at any time.

Alright, Jun-han, thanks for the coverage.

Always a pleasure, Dami.

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2026-02-26, 20:00 (KST)