South Korea’s Stock Market Breaks 5,000 as AI Frenzy Lifts Shares

South Korea’s main stock index just hit a big milestone. Back in January, it finally cracked the 5,000 mark for the first time. Since then, it hasn’t stopped climbing—fueled mostly by the global rush for artificial intelligence tech.

This is a real turning point for Asia’s fourth-largest economy. South Korea used to be seen as a market that moved in cycles, driven by exports. Now, it’s right in the middle of the global AI surge, all because it dominates the memory chip business that powers massive data centers.

Chasing the “5,000 Era”

President Lee Jae Myung talked about his dream of seeing the stock market hit the “5,000 era” during his presidency. Looks like it’s happening faster than anyone thought.

Jeong Eun Bo, the CEO of Korea Exchange, thinks the index can reach 6,000. He points to a few reasons:

• Korean tech companies are globally competitive
• there’s a push to boost shareholder returns
• and new governance rules (a page from Japan’s playbook) are shaking things up.

Still, there are bumps in the road. In 2025, South Korea saw its slowest economic growth in five years, mostly because construction spending dried up with the ongoing real estate slump.

But the outlook isn’t all gloomy. The Bank of Korea expects the economy to grow 1.8% this year, helped by stronger domestic spending and a rebound in the all-important semiconductor industry. The government also plans to roll out a hefty stimulus package—about 10 trillion won—as early as March to give struggling sectors a lift.

Exports Power Ahead, But Risks Lurk

Exports have been on a tear—up for eight straight months as of January, and growing at the fastest clip in over four years. The main driver? Soaring demand for AI servers, which means more chips shipping out.

China led the way in export growth, and sales to the U.S. jumped too. But it’s not all smooth sailing. Donald Trump, the former U.S. president, just threatened to slap tariffs back on Korean cars and other goods, frustrated by delays in investment promises tied to an old trade deal.

On top of that, the Korean won has slipped to its weakest level since the 2008 financial crisis. Investors are snapping up U.S. dollars, whether to buy American stocks or pay for imports, and it’s weighing on the currency.

Automakers Struggle in the Shadows of AI

Not every sector is catching the AI wave. Big carmakers like Hyundai Motor and Kia are feeling the pressure.

• Hyundai saw its operating profit tumble by double digits last year.
• Kia’s profits dropped 28.3%, even though it posted record sales.

These companies make up a big chunk of the benchmark index, so any flare-up with the U.S. on trade could spark a sell-off.

Semiconductors Take the Crown

If there’s a clear winner, it’s the chipmakers.

Samsung Electronics’ profit more than tripled in the fourth quarter, smashing records and beating Wall Street’s guesses. Not enough memory chips and heavy demand from AI servers pushed numbers higher. Samsung has started making next-gen HBM4 chips and expects HBM sales to triple again this year.

SK Hynix is in the same boat—its profit more than doubled to a record. Right now, SK Hynix owns around 61% of the global HBM market and supplies major players like Nvidia. They’ve already kicked off mass production of new HBM chips to keep up with the rush.

Global Investors Jump In

Funds like the iShares MSCI South Korea ETF have climbed about 27% in 2026, building on last year’s rally. Even after that run, stock prices aren’t out of control, so there’s still room to grow if the AI demand keeps rolling.

A Market at a Crossroads

South Korea’s market is at a key moment.

On the bright side:

• AI is driving incredible demand for memory chips.
• Chipmakers are raking in record profits.
• The stock index keeps hitting new highs.

But there’s another side:

• Trade tensions are bubbling.
• Non-tech companies, especially automakers, are under pressure.
• The currency is shaky.

One thing’s for sure—South Korea’s edge in memory technology puts it right at the center of the global AI boom. If the government keeps backing the market and global demand stays hot, this “5,000 era” could just be the start of a much bigger shift in South Korea’s markets.

Disclaimer: This article is for information only and isn’t financial advice. Always consider your own risk tolerance and talk to a professional before making investment decisions.