Historic peak: South Korean stocks surge, Samsung jumps 11% in a single day!
Absolutely insane! Absolutely insane!
Today, South Korea’s KOSPI Index exploded 6.84%, marking its largest single-day gain since late March 2020.
Among them, Korea’s market heavyweight Samsung Electronics was nothing short of explosive, soaring 10.8% today, marking its largest single-day gain since late October 2008.
What’s even more striking is that in just a few short years, the combined market capitalization of Samsung Electronics and SK Hynix has surpassed that of $TENCENT(00700)$ and $BABA-W(09988)$ . The AI-driven wealth boom is truly eye-catching.
Fueled by this surge, Korea-related ETFs have delivered eye-catching performance. $Direxion Daily MSCI South Korea Bull 3x Shares(KORU)$ is up more than 85% YTD; $iShares MSCI South Korea ETF(EWY)$ has gained over 24% YTD and jumped more than 4% overnight; $Franklin FTSE South Korea ETF(FLKR)$ is up over 23% YTD; and $PLUS Korea Defense Industry Index ETF(KDEF)$ has risen more than 27% YTD.
It’s sheer madness. Riding the AI tailwind, South Korea’s equity market first overtook Germany to become the world’s 10th-largest stock market, and then the combined market cap of Samsung Electronics and SK Hynix surpassed Tencent and Alibaba, reshaping the Asian investment landscape—truly astonishing.
Behind the explosive rally in Korean equities are three key drivers:
First, in the AI era, data centers are generating massive demand for memory. In this field, SK Hynix, Samsung, and Micron Technology form a tight oligopoly.
Second, Korea’s government and regulators have been pushing corporate governance reform, drawing global investors back. Last year, the Korean president unveiled a valuation-enhancement plan, explicitly setting a KOSPI target of 5,000.
Third, the robotics boom has powered sharp gains in Hyundai Motor—the parent of Boston Dynamics—and related companies.
As things stand, the AI boom remains red-hot. Samsung’s semiconductor division reported Q4 operating profit of KRW 16.4 trillion ($11.4 billion), well above the KRW 10.85 trillion consensus. Net profit reached KRW 19.29 trillion, beating the KRW 15.1 trillion estimate. Samsung also announced a KRW 3.57 trillion share buyback.
Simon Woo, Head of Korea Research at BofA Global Research in Seoul, said the memory-chip supercycle will run through 2027. Timothy Moe, Asia-Pacific Chief Equity Strategist at Goldman Sachs, estimates that semiconductors will account for about 60% of Korea’s expected earnings growth this year.
On valuation, the KOSPI trades at 19.8x earnings, with a forward P/E of around 9x over the next year—even cheaper than Germany’s 15.6x.
On the robotics front, Boston Dynamics unveiled the next-generation Atlas at CES 2026, featuring 360-degree rotating joints, tactile sensing, and automatic battery swapping. Its parent company, Hyundai Motor, plans to begin mass production in 2028, with annual capacity reaching 30,000 units. By 2030, Atlas is expected to handle complex, repetitive tasks such as heavy lifting.
Compared with AI, the robotics boom is only just getting started.
As Keith Bortoluzzi, Managing Director at Impactfull Partners, put it:
“Korea is no longer just a barometer of global trade. It is currently the only market sitting at the intersection of three defining trends of the 2020s: artificial intelligence, electrification, and defense.”
At present, Samsung Electronics and SK Hynix are not listed in the U.S., so for global investors, ETFs remain the primary way to gain exposure to Korean equities, such as:
$iShares MSCI South Korea ETF(EWY)$ : with assets exceeding $10 billion, strong liquidity, and a relatively low expense ratio, the fund has attracted over $1.7 billion in net inflows year-to-date. Samsung Electronics, SK Hynix, and Hyundai Motor together account for around 50% of the fund’s net asset value.
$Franklin FTSE South Korea ETF(FLKR)$ : with assets of about $300 million, liquidity is relatively weaker, but it offers the lowest expense ratio at just 0.09%, far below EWY’s 0.59%. Its holdings are more diversified than EWY, with less concentration in a handful of mega-cap names.
$PLUS Korea Defense Industry Index ETF(KDEF)$ : smaller in size, but focused on the defense industry. In today’s increasingly unstable global environment, with countries around the world ramping up military spending, KDEF is up 27% year to date, clearly outperforming EWY. At the same time, it has less exposure to semiconductors, meaning that if an AI bubble were to burst, KDEF could have relatively less downside risk.
$Direxion Daily MSCI South Korea Bull 3x Shares(KORU)$ : a 3x leveraged long Korea ETF, characterized by high volatility and not suitable for long-term holding.
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