"Hallyu" craze is killing it! Under the wave of the "super cycle of storage," JPMorgan Chase is shouting for the South Korean stock market to soar to the "10,000-point era."

The Wall Street financial giant Morgan Stanley has significantly raised the target points for the benchmark stock index of the South Korean stock market, the Kospi Composite Index, twice in less than a month. The most core logic undoubtedly lies in the bull market storyline that is far from over under the backdrop of the "storage chip super cycle" driven by the AI infrastructure frenzy, coupled with the company governance reform initiatives led by South Korean President Lee Jae-myung and growth factors in the industrial sector. After the opening of the Asian market on Monday, the Kospi Composite Index rose more than 5% to hit a new historical high, leading the Asia-Pacific market in the backdrop of rising oil prices and escalating tensions between the US and Iran. So far this year, the index has risen by over 85%, outperforming global markets and being called the most insane stock market in the world up to 2026. The largest commercial bank on Wall Street raised the target for the South Korean Kospi Composite Index to 9,000 points and the target under the bullish scenario to the epic level of 10,000 points, implying a whopping 33% increase from the closing point on the previous Friday. In comparison, the benchmark and bull market targets set in late April were 7,000 points and 8,500 points, respectively. As of the time of writing, the South Korean Kospi Composite Index is hovering around 7,800 points. Investors in the global stock market are enthusiastic about the almost wild bullish sentiment surrounding the South Korean stock market, all of which can be attributed to the most core investment theme: the unprecedented AI frenzy driving the storage chip super cycle. Last Wednesday, overseas individual/institutional investors outside of Korea bought over $2 billion worth of Korean stocks through cross-border ETFs, just slightly lower than the historical record set in October last year. The Korean wave (K-Pop) can be said to have swept from the Seoul fashion circle to the global financial market. Under the backdrop of the so-called "storage chip super cycle" driven by the unprecedented AI infrastructure frenzy, the two super storage chip giants headquartered in KoreaSamsung Electronics and SK Hynix, which together account for nearly 50% of the weight of the South Korean Kospi Composite Index, are the strongest engines attracting global funds as well as the most core DRIVE behind the repeated highs and significant outperformance of the South Korean stock market over global stock markets. The Kospi Composite Index of the South Korean stock market has seen a rise of more than 85% since the beginning of 2026, outperforming last year's wild increase of 76% in global stock markets. However, unlike the year 2025, which saw a total increase of 76%, the 2026 increase of less than five months since the beginning of the year has already surpassed the 76% increase of the entirety of 2025. Senior strategists from Wall Street are competing to raise their outlook for the South Korean stock market, with the core reason being the exponential growth of the storage chip industry driven by the global AI frenzy. On Monday, the Kospi rose by 5.1%, hitting an intraday record high of 7,876.60 points, expanding its year-to-date increase to about 86%, and cementing its unparalleled position as the best performing stock market globally. Morgan Stanley's latest upgrade came after another Wall Street giant, Goldman Sachs, raised its Kospi target to 9,000 points last week, citing South Korea's strongest profitability expansion momentum. As shown in the figure above, the South Korean Kospi Index has risen by over 80% this year, significantly outperforming the Philadelphia Semiconductor Index, which is known as the "global chip stock barometer." Note: Index performance is standardized as of January 2, 2026. As the upward trend of the South Korean Kospi Index continues, overheating signals are also increasing, with the index's 14-day Relative Strength Index (RSI) being in overbought territory every trading day this month. However, Morgan Stanley's team of strategists, including Mixo Das, wrote in a report that while the technicals may appear overstretched in the short term, "the key fundamentals of the market are still on trackoptimistic conditions in the storage chip cycle, corporate governance reform, strong thematic growth." "Under these unique conditions, we believe continuing to position for further upside is still very appropriate, rather than prematurely predicting the end of the cycle." The strategists added that the next two years may mark a new round for storage chips characterized by a continued significant increase in prosperity driven by both average selling price and record shipments. The two super storage chip giants, SK Hynix and Samsung Electronics, whose stock market values account for about 50% of the benchmark index weight in South Korean stocks, have propelled this year's approximately 70% increase. Global funds are actively investing in Korean chip stocks, with the iShares MSCI South Korea ETF listed on the US stock market skyrocketing 95% year-to-date, outperforming major US indices and the Philadelphia Semiconductor Index. Investors focusing on the Hong Kong stock market are also actively buying leveraged chip ETFs linked to the South Korean single chip sector, with SK Hynix doubling year-to-date and Samsung Electronics doubling year-to-date gains of 503% and 340%, respectively. In addition, the China-A shares listed Sino-South Korean semiconductor ETF has also seen a year-to-date increase of up to 117%. Whether it is Google's massive TPU AI computing cluster or NVIDIA's AI GPU computing cluster on an enormous scale, the need for a comprehensive integration of HBM storage systems that carry AI chips cannot be overlooked. Coupled with the current surge in AI data center constructions from tech giants requiring massive purchases of server-grade DDR5 storage and enterprise-level high-performance SSDs/HDDs; Samsung Electronics, SK Hynix, and Micron Technology happen to be the most direct beneficiaries in the most critical storage areas: HBM, high-performance server DRAM (including DDR5/LPDDR5X), and high-end data center-level SSDs, reaping significant benefits from the "super bonus" of the AI infrastructure boom. The turmoil in the Middle East cannot suppress the narrative of the "AI bull market"! AI has completely ignited the "storage super cycle," causing shortages from HBM to NAND. The South Korean Kospi has skyrocketed by about 85% this year, with Samsung Electronics reaching a market capitalization exceeding $1 trillion and SK Hynix's stock price hitting new highs. This is not merely a domestic bull market in South Korea, but it is the global funds betting on the fact that the "AI-driven storage super cycle" is far from over. The well-known analyst team led by Ben Reitzes at Melius recently released a report stating that the AI frenzy will drive strong growth in storage chip demand until the end of this decade (2030). According to Counterpoint Research, the storage market has entered a "super bullish" or "super cycle" phase, with the current supply and demand and price trends far surpassing the historical highs during the period of the cloud computing frenzy in 2018. With the rapid emergence of super AI agents such as Anthropic's Claude Cowork, and OpenClaw in 2026, this wave of AI intelligent agents is rapidly sweeping the globe, and the bottleneck in AI computing architecture is shifting from GPUs core on matrix multiplication throughput to the "AI intelligent agent-driven artificial intelligence full-stack system." In this new narrative shift of the AI mainstream storyline, data center CPUs and storage chips may be the biggest winners. In other words, the AI computing bull market is transitioning from the "AI GPU/ASIC centered computing system to the central processor and the "data storage foundation" driven by AI intelligent agents. According to reports citing sources familiar with the matter, SK Hynix, the superpower in the HBM storage arena, is being actively pursued by the world's largest tech companies in an "unusual" wayMicrosoft, Google, Amazon, and other global cloud computing giants are proposing unprecedented massive investments in its new production lines and are planning to personally invest in purchasing expensive chip manufacturing equipment, including ASML lithography machines, cutting-edge HAR etching and thin film deposition equipment, to expand capacity in coordination programs to ensure as much capacity and supply of HBM, DRAM/NAND storage chips as possible. This method of offering investment funds for equipment procurement has been unprecedented in the global storage chip industry, highlighting the extremely severe shortage of these components on a global scale; at a time when the unprecedented AI frenzy is driving a surge in demand for computing infrastructure, storage chip manufacturers are struggling to keep up with the exponential demand growth. Three sources indicated that another proposal involves customers providing significant financial support for the purchase of semiconductor manufacturing equipment, such as ASML's extreme ultraviolet EUV lithography machines or even more expensive high-NA lithography machines; these devices are used to print circuits on silicon wafers, etch, deposit thin films, CMP (chemical mechanical polishing), and a series of cutting-edge chip manufacturing processes, with a value of billions of dollars. Two of the sources stated that this South Korean chip manufacturer is very cautious about accepting financial and investment commitments from customers, as such transactions may make them subject to specific buyers and may further require them to supply storage chips at lower prices compared to the market price in exchange for longer-term, more stable revenue guarantees. Storage chip manufacturers have long stated that multi-year contracts will help smooth out the significant fluctuations in demand and reduce the massive investment risks in this cyclical industry; this industry often requires investments of tens of billions of dollars to significantly expand capacity. The unprecedented AI infrastructure boom and the storage super cycle have taken the semiconductor industry to a more "material-intensive, process control-intensive, and packaging technology-forward" new stage: the logic side three-dimensional structures and new material overlays, the storage side HBM stack and interconnect upgrades, and the packaging side CoWoS/hybrid bonding have all increased the value density of key processes such as deposition/etching/CMP/advanced packaging/core measurement. These three forces together have raised the value density of critical processes such as deposition/etching/CMP/advanced packaging/core measurement, and have transformed the semiconductor equipment-related demand from "cyclical fluctuations" to a more pronounced "structural expansion cycle." The most crucial bottom base equipment in expanding storage chip production does not only involve ASML lithography machines but also includes the expensive high aspect ratio (HAR) etching/deposition, CMP (chemical mechanical polishing), measurement/detection, and hybrid bonding equipment required for HBM/DRAM/NAND storage. However, the two storage chip suppliers in South Korea are acting very cautiously on how to allocate scarce capacity to avoid antitrust scrutiny or the perception of favoring specific customers. "They dont want to bet on a single horse in the AI race and end up betting on the wrong target," one source said.