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Fast reading
- South Korea’s KOSPI index has surged more than 70% YTD1.
- Samsung Electronics rose 15% on Wednesday as the company’s market capitalisation hit US$1tn.
- Samsung and rival SK Hynix remain among the cheapest ways to play the AI-driven semiconductor rally, according to our investment team.
The momentum behind tech stocks this earnings season shows little sign of running out, with South Korean tech names surging this week amid renewed excitement around artificial intelligence (AI).
South Korean equities have been Asia’s standout performers over the past year. The KOSPI Index has surged more 70% YTD2, and hit a new record high on Wednesday, led by Samsung Electronics (up 15%) and rival chipmaker SK Hynix (up 10%), lifting the South Korean blue-chip index above 7,000 for the first time.
Samsung joined the small cohort of companies valued at more than US$1tn, becoming only the second east Asian firm to do so after TSMC.
The KOSPI increased by 83% in 20253 on the back of improvements to corporate governance in the country and investor optimism about AI and semiconductors.
Broader equity markets also posted solid gains this week, with the tech-heavy Nasdaq leading the charge and the S&P 500 trading around record highs as investors continue to pile into AI and semiconductor stocks. In Europe, the STOXX 600 also edged higher, while Japan’s Nikkei 225 extended its recent rally, hitting 62,000 for the first time on Thursday.
“Samsung’s outperformance reflects stronger earnings momentum, driven by rising conventional memory prices and accelerating demand for high‑bandwidth memory (HBM) used in AI applications, and reinforces the company’s central role in the global AI supply chain,” says James Cook, Investment Director, Emerging Markets.
“Samsung continues to trade at an extremely attractive valuation of 5-6x forward earnings, reflecting the scale of earnings upgrades rather than outright multiple expansion. Progress in AI‑related collaborations with leading US technology firms, alongside resilient demand for premium smartphones, has further underpinned sentiment,” Cook adds.
Figure 1: Samsung vs. the broader South Korean market
Despite soaring share prices over the past year, Samsung and rival SK Hynix remain among the best value ways to play the AI-driven semiconductor rally, says Jonathan Pines, Head of Asia ex-Japan at Federated Hermes, particularly as tight memory supply could impact the market for years.
“On prospective earnings, Samsung and SK Hynix remain among the cheapest semiconductor stocks globally, even after more than quadrupling in price over the last year,” he says.
“Some investors, even those sceptical of the duration of the AI boom, and conscious of the historic volatility of the memory cycle and record high projected margins, have concluded that the memory cycle might last a while – so, if they are to play the AI theme, it may as well be in the cheapest stocks,” Pines adds.
“All of this is against a backdrop of a highly supportive regulatory environment and ongoing governance reforms in South Korea being driven by a government determined to eliminate the Korea discount4.”
This information does not constitute a solicitation or offer to any person to buy or sell any related securities or financial instruments.
1 CNBC, as at 6 May 2026.
2 CNBC, as at 6 May 2026.
3 Behind South Korea’s spectacular surge | Federated Hermes Limited
4 The so-called ‘Korea discount’, led to local companies persistently trading at lower price-to-earnings multiples than global peers, however corporate governance reforms introduced over the last year have addressed many of the causes of the discount.
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