KOSPI Surges 75% to Hit World's 7th Largest Stock Market in 2026

It closed at 7,490.05 on May 7, up 1.43% for the day and more than 75% for the year so far. South Korea's total listed market capitalization rose 71% to $4.59 trillion, beating Canada's $4.5 trillion to take seventh place in the world's stock rankings. This is the fourth time this year that South Korea has passed a country in this way.

In January, they passed Germany, then France, then the UK in April, and now they have passed Canada. Citi has raised its goal for the KOSPI from 7,000 points to 8,500 points, which means that prices could go up even more than 13% from where they are now.

Most of the power behind this huge re-rating lies with just two companies: Samsung Electronics and SK Hynix.

Two Companies, 45% of the Index, One Trade

Samsung's market value went over 1,500 trillion won on May 6, when its share price rose nearly 15% in a single session. This made it the second Asian tech company, after TSMC, to reach a market value of $1 trillion. SK Hynix set a new record high for the second day in a row on the same day. Its stock price reached 1.6 million won and its market value surpassed 1,100 trillion won, giving the company a gain of over 146% so far this year.

Samsung and SK Hynix together make up about 45% of the KOSPI's overall weighting. Because of this, the Korean stock market can be thought of as a stand-in for the AI memory chip cycle. Korea goes up when demand for HBM goes up. The connection is very much like a machine.

Both businesses are doing very well because supply and demand are as tight as they have ever been in the semiconductor industry. As for demand, the four biggest hyperscalers—Amazon, Google, Microsoft, and Meta—plan to spend a total of $700 billion on capital expenditures in 2026. A big chunk of that will go toward data center gear, especially memory chips, which are essential for running the servers. On the supply side, the three biggest memory makers have put more than 90% of their advanced capacity into HBM and high-end memory. This has made normal DRAM scarce and turned the memory market as a whole into a seller's market.

SK Hynix has sold out of all of its 2026 product lines. Samsung has used up all of its HBM4 storage. Those are not predictions; they are confirmed order book positions that guarantee income for several quarters.

The Decade-Long Context: Korea Is Still Behind Taiwan

The current rise in the KOSPI is very fast, but it comes after similar moves in other markets. Nasdaq has returned 445% over the past ten years, while Taiwan's index has gained 415%, Japan's Nikkei has gained 290%, and the KOSPI has returned 279%, making it the fourth best performer among big indices.

Korea's poor performance compared to Taiwan is due to the fact that TSMC's rise, which was driven by AI and started in earnest in 2023, happened at a different time than Korea's, which was driven by HBM and only picked up speed in the second half of 2025.

It could be said that Taiwan's score is even more concentrated than Korea's. With Foxconn, MediaTek, and Delta Electronics at the top, TSMC alone makes up more than 40% of Taiwan's market capitalization.

This is a condensed version of the world AI hardware supply chain. Korea's rise is newer, and the link between its semiconductors and its index may be even stronger. Japan's first move was caused by a different factor: the Tokyo Stock Exchange's push for companies to trade above their book value, which was a capital efficiency reform that happened before the AI chip wave.

How Much Further Can the Rally Run?

The bull case is built on strong roots that will last. It's not possible that the HBM duopoly between Samsung and SK Hynix will be broken soon. It takes three to five years to break through technological barriers in advanced memory packaging and wafer fabrication on a commercial level.

Long-term supply agreements that include methods for guaranteeing the lowest price keep manufacturers in charge of prices. AI inference tasks are shifting toward agents that are always running. This will greatly increase the number of tokens used by each user and keep memory demand growing well beyond what is currently expected.

A study from Goldman Sachs that was used in the analysis gives more structural support: token prices are stabilizing and rising again, and computing costs are falling quickly. This creates a margin expansion dynamic that supports the AI ecosystem's ability to make money by meeting memory demand. Goldman says that the story of commercialization may have just started.

The bear case makes the same amount of sense. The KOSPI has gained 75% so far this year, which means that earnings expectations are already priced at a very high level. This means that there is much less room for error in future financial reports. Leveraged margin trading by Korean individual and institutional investors has gone up along with the index. 

This has increased returns on the way up and set the stage for faster deleveraging if the trend changes. The $700 billion that hyperscalers have spent on capital expenditures needs to eventually bring in enough user revenue to cover the costs. However, no one has yet provided clear commercial data to answer this question.

South Korea's rise to the seventh-largest stock market in the world is a direct result of the AI memory supercycle, which is centered on two companies with nearly monopoly positions in HBM and sold-out order books. Citi's goal of 8,500 for the KOSPI shows that the bull case still has more to go.

The structural risks include index concentration, buildup of debt, and the unanswered question of how to make money with AI. These risks create the conditions for a sharp drop if any one assumption breaks. The main trade is easy to understand: Korea's re-rating will continue as long as AI infrastructure capital expenditures stay the same and memory demand turns into long-term profit. If capex falls short or the HBM margin cycle peaks, the 45% weighting of Samsung and SK Hynix will make sure that the correction is just as bad as the rise.