Never Mind Wobbles: AI-Related South Korean Stocks Aren't Losing Allure – Wealth Managers

Editorial Staff

13 July 2026

The sharp selloff to South Korea’s tech behemoths Samsung Electronics and SK Hynix, which have flourished on the back of the AI story, is not yet a reason to think that the tech forces driving the market are fading, according to , up from 36 and 17 per cent at the same points in 2025 and 2023. And in terms of market cap, these two sub-industries now represent 63 per cent of aggregate market cap, significantly higher than the 30 per cent as of end June 2025,” he said.

“It is no surprise, therefore, that any uncertainty relating to the continued strength of the memory super-cycle will be immediately reflected in index-level volatility. And we have previously noted that when the tech cycle reverses, the South Korean equity market will face severe headwinds with the scope for a substantial retracement. Despite this risk, however, we believe it is premature to call an end to the forces driving the Asian and South Korean tech sectors,” he wrote.

In an 18 June note from its chief investment office, global wealth management, UBS said that equities in North Asia, particularly Taiwan and South Korea, “should continue to outperform thanks to tech strength.”

Over at RBC Wealth Management, the view of South Korea is sanguine after the recent stock market dramas.

"The current correction in South Korea appears healthy, with Korean equities remaining attractive over the medium-to-long term: South Korea’s KOSPI Index has entered bear market territory, declining more than 20 per cent from its peak in late June, as investors reassess the sustainability of AI-driven gains. Foreign investors have withdrawn over $100 billion from Korean equities, while retail traders have amplified volatility. We view the current correction in South Korea as healthy, and we remain constructive on Korean equities over the medium-to-long term as the country is home to strategic companies in the memory space," it said.

Earnings and caution
Bratton said investor caution could be understood “if the sector was losing earnings momentum or if there was growing uncertainty over the earnings outlook.”

“But the fundamental backdrop to this headline volatility, and expansion in the implied equity risk premium, is that earnings expectations for the sector – as per Bloomberg consensus – continue to be lifted at a high tempo, even as it has been sold off. In fact, our technology team maintain their view that the current memory super-cycle will sustain its momentum over the near term given the powerful combination of surging demand and constrained supply,” he continued.

Bratton concluded by saying that he accepted that the tech sector would remain jittery due to earnings momentum and the relative lack of compelling earnings stories in the region.

“This is likely to continue favouring the NE Asian equity markets (including South Korea) over China and India, and, within China, we prefer the production complex (tech, industrials, and materials) over the consumption sectors,” Bratton said.