[Edaily Reporter Park Soon-yeop] Analysts have concluded that the domestic stock market has entered a new growth phase unlike any seen before, reflecting a surge in semiconductor profits driven by the growth of artificial intelligence (AI). Although the KOSPI has surged sharply in the short term, the pace of upward revisions to earnings forecasts is even faster; consequently, the market’s confidence in the sustainability of semiconductor profits will determine the potential for further gains.
Lee Young-won, an analyst at Heungkuk Securities, stated in a report titled “Stock Market in the Second Half: Adapting to AI Growth” released on the 17th, “The Korean stock market is experiencing strong growth unlike anything seen before,” adding, “This is because AI-driven growth is being translated into profits.”

The report focuses on the semiconductor sector. Lee noted that the semiconductor sector is showing a particularly strong performance in stock markets worldwide, including South Korea. This is because semiconductors provide the physical infrastructure necessary for AI growth. In fact, among the world’s top 20 companies by market capitalization, the number of semiconductor firms has increased from 3–4 in 2023–2025 to 8 currently. #Samsung Electronics has risen to 12th place and #SK Hynix to 16th place in global market capitalization, elevating the standing of South Korean semiconductor companies.
Samsung Electronics and SK Hynix are also leading the rally in the domestic stock market. Heungkuk Securities projected that the operating profits of Samsung Electronics and SK Hynix will increase from 43.6 trillion won and 47.2 trillion won, respectively, in 2025 to 355.4 trillion won and 258.6 trillion won, respectively, in 2026. The report also projected that the two companies’ share of total KOSPI 200 operating profit would rise from 32.1% in 2025 to 68.3% in 2026 and 71.5% in 2027.
Semiconductor exports were also cited as a factor supporting both the economy and the stock market. According to the report, South Korea’s exports in May reached $87.7 billion, a 53% increase from the same month last year, with semiconductor exports alone rising 168% to $37.3 billion. Semiconductor exports have remained in the $30 billion range for three consecutive months, and their share of total exports rose to 42.5% in May.
The backdrop to this semiconductor boom is the expansion of AI investment. The analyst noted that AI development is still in its early stages. Current AI has reached the level of inferential AI, and some agent AI has begun practical application; therefore, AI investment is bound to continue at a rapid pace until we enter the full-fledged era of Artificial General Intelligence (AGI).
The evolution of AI is leading to increased token consumption and expanded investment in data centers. Heungkuk Securities analyzed that agent AI can increase token consumption per task by up to 500 times or more compared to existing models. The firm concluded that demand for physical storage and memory semiconductors is bound to surge to handle this.
Capital expenditure (CAPEX) forecasts for hyperscalers are also being rapidly revised upward. At the end of last year, the combined 2026 CAPEX forecast for five companies—Amazon, Google, Microsoft, Meta, and Oracle—was $602 billion, but it rose to $705 billion by the end of the first quarter of this year and currently stands at $760 billion. Long-term projections suggest this figure could exceed $1 trillion by 2028 and reach $4 trillion by 2030.
The structure of the memory semiconductor industry is also expected to work in favor of domestic companies. The memory semiconductor market remains an oligopoly centered on the top three companies: Samsung Electronics, SK Hynix, and Micron. According to Heungkuk Securities, the market share of the top three companies reached 90.5% as of the fourth quarter of 2025. The analysis suggests that the supplier-dominated market structure is likely to persist, as building new fabs requires massive investment, and Chinese companies face difficulties in narrowing the technology gap due to supply restrictions on extreme ultraviolet (EUV) equipment.
The benefits of AI growth are expected to spread from the semiconductor sector to the broader AI ecosystem. The report anticipates that, alongside the concretization of domestic AI policies, investment will expand to encompass semiconductors, data centers, and physical AI. It explains that, ahead of the enforcement of the Special Act on AI Data Centers (AIDC), investment could spread across the entire related industry, including data center construction, networks, cooling and HVAC systems, and power infrastructure.
Physical AI was also presented as a new opportunity for the Korean manufacturing sector. The analyst assessed that the Korean manufacturing sector possesses the mature industrial infrastructure necessary for real-world data collection, learning, and practical application. In particular, the analyst noted that Hyundai Motor Group, with its finished vehicle production lines, vehicle data, robot hardware, demonstration sites, and parts value chain, can be viewed as a company positioned at the device layer where physical AI operates.
However, there are also risks in the second half of the year. Rising interest rates are a variable that could constrain the AI investment cycle. Heungkuk Securities noted that as the scale of investment in AI data centers has grown rapidly, hyperscalers have reached a point where it is difficult for them to cover these costs with internal cash flow alone. It was pointed out that if the cost of external financing increases due to rising interest rates, there is a possibility of a contraction in CAPEX, which could become a factor increasing volatility in semiconductor stock prices.
Nevertheless, the assessment is that valuation pressures are not yet significant. According to Heungkuk Securities, the 12-month forward P/E ratio for the Korean market stands at the mid-7x range, remaining at its lowest level since the global financial crisis. In particular, the P/E ratios of semiconductor companies such as Samsung Electronics and SK Hynix are at around 5.8x.
The analyst explained, “Although the KOSPI surpassed the 8,000 mark on the back of explosive profit growth by semiconductor companies in 2026, earnings outlooks are being revised upward even faster than the steep rise in stock prices, keeping the 12-month forward P/E ratio at around 7.5 times.” He added, “Whether semiconductor company valuations improve and the market’s average P/E returns to its historical average will depend on the extent to which market confidence improves,” and concluded, “If we apply the 10-year average P/E of 10.3x, the KOSPI could rise to the 10,080 range this year.”