"Hallyu" dominates the global trading platform! South Korean stock market soars 75% under the AI craze, making it the craziest stock market of 2026 so far.

The Korean stock market is on the verge of surpassing the 76% wild surge that led the global stock market last year. However, what sets apart the unprecedented growth in 2026 is that it has achieved a 76% increase in less than five months since the beginning of the year. As of the Wednesday closing, the benchmark stock index of Korea - the Kospi Composite Index - surged by 6.5%, bringing its year-to-date increase to an astonishing 75%. This marks the eighth time this year that the index has seen a single-day surge of over 5%, compared to just one such increase in 2025. On Wednesday, overseas retail and institutional investors outside of Korea directly or indirectly bought over $2 billion in Korean stocks through cross-border ETFs, just slightly below the historical record set in October last year. The Korean Wave (K-Pop) is making waves not only in the Seoul fashion scene but also in the global financial market. The enthusiasm surrounding the Korean stock market is largely attributed to the core investment theme of the artificial intelligence-driven storage chip super cycle. Korean tech companies, long overlooked by global investors, such as Samsung Electronics and SK Hynix, are now being reevaluated for their exclusive technological advantage in the AI computing industry chain. This has made their products and the popular tech stocks behind them even more sought after. Fueled by the strong performance of the Korean and Taiwanese stock markets, there is a historic divergence in global stock markets, with Asian markets continuously outperforming the US stock market and developed market benchmark indices. The themes of "AI panic trading" and "AI disrupting everything" are reshaping the asset allocation logic of global investors, driving global institutional and retail funds towards the Asian stock markets believed to have the most concentrated list of participants in the AI computing industry chain. With the AI-driven so-called "storage chip super cycle" fueled by unprecedented AI infrastructure frenzy, the two major super storage chip giants headquartered in Korea - Samsung Electronics and SK Hynix, which together account for nearly 50% of the Kospi Composite Index, are acting as the strongest engines attracting global funds and propelling the Korean stock market to new highs. Samsung Electronics hit a milestone on Wednesday with a 75% increase year-to-date and a market value surpassing $1 trillion, becoming the second Asian company after Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR to reach a market value of $1 trillion. SK Hynix, holding a dominant position in the HBM field, has seen even stronger growth with an increase of over 130% year-to-date. Global funds are actively buying Korean chip stocks, with the iShares MSCI Korea ETF trading on the US stock market soaring 80% year-to-date, outperforming the US market and the Philadelphia Semiconductor Index. Investors in Hong Kong are also actively buying leveraged chip ETFs linked to the Korean single chip sector, with SK Hynix experiencing a 345% increase year-to-date in the Hong Kong-listed ETF and Samsung Electronics seeing a 290% increase. Additionally, the China-Korea semiconductor ETF listed on the A-share market has seen an increase of up to 83% year-to-date. Whether it's the massive TPU AI computing cluster of Alphabet Inc. Class C or the high-level NVIDIA Corporation AI GPU computing cluster, both rely on fully integrated HBM storage systems that house AI chips. Adding to this, major tech giants are accelerating the construction or expansion of AI data centers, requiring large-scale purchases of server-grade DDR5 storage and enterprise-grade high-performance SSD/HDD. Samsung Electronics, SK Hynix, and Micron Technology, Inc. are all positioned in the core storage areas of HBM, server high-performance DRAM (including DDR5/LPDDR5X), and high-end data center-grade SSD, making them the most direct beneficiaries in the "AI memory + storage stack," reaping the benefits of the AI infrastructure wave. "It's scary because they still have tremendous upside potential," said Chan H. Lee, Managing Partner of the well-known hedge fund Petra Capital Management in Seoul. "This is not just a Korean story; this is the storage super cycle under the global AI wave. Samsung Electronics' intrinsic value is finally being recognized." As shown in the image above, under the AI frenzy, the Korean Kospi index has been soaring this year. Amid long-term supply constraints and market expectations for continued strong growth unaffected by overall economic cycles, storage chip manufacturers are among the most sought-after stocks globally. Despite the significant increases in the stock prices of Samsung Electronics and SK Hynix (also known as SK Hynix Inc.) this year, and the record high performances, analysts believe that given the endless demand for storage chips and their relatively low valuations, there is still room for further increases in their stock prices. South Korean President Lee Myung-bak's policy to promote stocks as the cornerstone of family wealth, coupled with his efforts to strengthen corporate governance and increase shareholder returns through reforms, is also supporting the Korean market. While the surge in oil prices under the backdrop of the Iran conflict has increased risks for some industries, this conflict has also brought renewed attention to the global competitiveness quietly accumulated by Korean shipbuilders and international defense companies in the arms industry. However, despite the convergence of multiple favorable factors, the market is becoming increasingly concerned about the excessive nature of this rally. The Kospi closed at 7,384.56 points on Wednesday, far exceeding Lee Myung-bak's target of 5,000 points proposed during his election campaign last year, which was once considered unimaginable. The benchmark index is also closing in on the seemingly ambitious year-end target of 8,000 points set by Wall Street financial giant Goldman Sachs Group, Inc. last month. What highlights the narrow breadth of this rally is the fact that despite key indices surging, over 600 of the 835 constituent stocks making up the Kospi Composite Index fell on Wednesday. Ihor Dusaniwsky, Head of Predictive Analytics at S3 Partners, wrote in a report to clients earlier this month that short sellers are increasing their bets, believing that a significant retracement is inevitable in the near term after such a rapid and explosive rally. "I will also maintain a cautious stance from here on, as the macro backdrop is no longer entirely favorable," said Jung In Yun, CEO of Fibonacci Asset Management Global. "The market is increasingly relying on the sustained earnings upgrades of a few semiconductor industry leaders. If global liquidity tightens further, or if AI spending expectations begin to normalize growth, given how concentrated this rally has become, volatility could rise quite rapidly." As shown in the image above, driven by AI chip demand, South Korea leads the global trend of earnings upgrades this year. Although this unprecedented rally may seem precarious, many analysts believe that the strong earnings growth provides ample support - the consensus expects the overall earnings growth of Kospi constituent stocks in the next 12 months to exceed 200%. Samsung's current price-to-earnings ratio is only 6 times, while SK Hynix's is 5.3 times, indicating that their valuations are only a small fraction of the 22 times valuation of the global AI chip super giant NVIDIA Corporation (NVDA.US). "The rally in the Korean market is supported by multiple tailwinds," said Stanley Tang, Senior Portfolio Manager at Sumitomo Mitsui DS Asset Management Co. "Fueled by the nearly endless demand for AI computing power, storage chip manufacturers are seeing historic highs in profits; while shipbuilding companies benefit from a bull market cycle in the shipping industry under the current political crisis and relatively low steel prices." Without enough storage chips, AI models have to recalculate from scratch! HBM, DDR5, and SSD jointly open the storage chip super cycle Regarding the rising prices of DRAM/NAND storage chips, the latest assessment by the Wall Street financial giant Goldman Sachs Group, Inc. predicts that the price increase of storage chips in 2026 will far exceed the optimistic expectations previously given by the institution. Goldman Sachs Group, Inc. has recently raised its forecast for DRAM storage chip price increases from about 150% to 250% - 280%, and its NAND price increase forecast from about 100% to 200% - 250%. This indicates that Goldman Sachs Group, Inc. believes that this is not a typical inventory replenishment cycle, but rather a "super supply shortage cycle" caused by an unprecedented surge in demand driven by AI computing power, highly complex manufacturing and packaging processes in the HBM arena, and insufficient elasticity in the general supply of DRAM/NAND. GPUs are responsible for generating intelligence while HBM/DRAM handles high-speed data exchange. Enterprise-grade NAND/eSSD manages hot data and caches, while HDD is tasked with long-term storage of cold/warm data in massive quantities. Therefore, Goldman Sachs Group, Inc. believes that the AI arms race led by cloud computing giants is turning storage chips from cyclical products into scarce strategic assets. The increase in DRAM/NAND prices in 2026 is not the end, but could be the initial stage of a super cycle. With the launch of Anthropic's landmark tool Claude Cowork and AI agents such as OpenClaw taking on autonomous tasks, the wave of AI agents is sweeping the globe at an unprecedented pace by 2026. This wave is driven by super agents (AI Agents), which are rapidly making their mark on the global landscape, shifting the bottleneck of AI computing architecture from GPUs core matrix multiplication throughput to "AI agent-driven artificial intelligence full-stack systems." And in this narrative shift of the AI mainline, data center CPUs and storage chips may emerge as the major winners. In other words, the AI computing bull market is transitioning from the "AI GPU/ASIC chip-centric computing system" to computers and data storage bases. Amid the massive AI data center construction frenzy worldwide, which has brought in record cash inflows and an endless demand for storage chips, the latest performance data released by Samsung Electronics, the world's largest supplier of DRAM/NAND storage chips, shows that the tech giant's semiconductor manufacturing business far exceeded expectations, with profits soaring a whopping 48 times. The leader in SSD storage products, SanDisk, reported revenue of $5.95 billion in the third quarter, a 97% year-on-year increase, well above analysts' expectations of $4.7 billion. Adjusted earnings per share of $23.41, almost 1.6 times the analyst's expected $14.54, with the company's data center business revenue more than tripling year-on-year, reaching $1.47 billion for the quarter. A recent report from the Melius analyst team led by star analyst Ben Reitzes stated that the AI boom will continue to drive a strong increase in demand for storage chips well into the end of this decade (2030). According to market research firm Counterpoint Research, the storage market has entered a "super bullish" or "super cycle" phase, with current supply-demand and pricing far exceeding the historical highs of the cloud computing boom in 2018. As Anthropic's heavy-hitting tools like Claude Cowork and self-executing AI agents like OpenClaw explode in 2026, this wave of AI agents is rapidly sweeping the globe, and the bottleneck in AI computing architecture is transitioning from GPUs core matrix multiplication throughput to a "system driven by AI agents". In this shift in the AI narrative, data center CPUs and storage chips may emerge as the biggest winners. In summary, the AI computing bull market is transitioning from the "AI computing framework centered on GPU/ASIC chips" computing system to CPUs and the "storage base" driven by AI agents.