KOSPI Rally Roars to Record Highs as Nvidia Deals Supercharge Korea

KOSPI rally momentum carried into November as South Korea’s benchmark jumped to fresh records, fueled by Nvidia’s new partnerships with leading Korean firms and a calmer trade backdrop with the United States.

The benchmark Kospi Index, which surged 20% in October—its strongest monthly rise since 2001—climbed as much as 2.7% on Monday to a new high. The index is up 76% year-to-date, outpacing every other major stock benchmark worldwide and punctuating how quickly Korea has moved to the center of the global artificial intelligence supply chain.

Investors credited technology bellwethers for the latest leg higher. Shares of Samsung Electronics and SK Hynix led advances after a week of headline deals and executive visits, underscoring how the KOSPI rally has become a proxy for AI infrastructure demand.

What’s driving the KOSPI rally

The immediate spark came from Nvidia’s deepening ties with Korea’s corporate heavyweights. Nvidia CEO Jensen Huang met in Seoul with Samsung Chairman Jay Y. Lee and other leaders while in town for the APEC CEO Summit, announcing a series of partnerships that reinforced Korea’s role in AI chips, data centers, and autonomous systems.

SK Hynix soared as much as 11% after Amazon CEO Andy Jassy said the companies plan to jointly explore emerging technologies, including agentic AI. The jump followed SK Hynix’s record quarterly profit and a bold call from SK Securities analyst Han Dong-Hee, who argued the traditional cyclical price-to-book playbook no longer fits high-bandwidth memory and advanced packaging. In a sign of how the market narrative is shifting, Han lifted his price target on SK Hynix to 1 million won from 480,000 won, citing a “new paradigm” for memory profitability.

Samsung Electronics also climbed, aided by a higher target from the same brokerage and by expectations that Samsung’s foundry, memory, and packaging depth will secure a larger slice of AI-related orders. Other names tied to Nvidia partnerships advanced, including Hyundai Motor and Naver, reflecting how AI is migrating from chip design to mobility, cloud, and consumer services.

The KOSPI rally also drew strength from supply chain beneficiaries. Power equipment maker HD Hyundai Electric rallied on expectations for a multi-year upgrade cycle in grid capacity to support AI data centers. Robotics and self-driving firms gained as investors priced in downstream demand from industrial automation and smart mobility.

Market breadth widens beyond chips

Monday’s move was notable for its breadth. Defense stocks, led by Hanwha Aerospace and Hanwha Ocean, climbed after a pact with the US to build a nuclear-powered submarine at an American shipyard improved the sector’s long-term outlook. While defense is not directly tied to AI spending, the advance highlighted how the KOSPI rally has broadened across industries as investor confidence improves.

Automakers, internet platforms, and capital goods names added to gains. The widening participation matters for sustainability because it reduces the index’s reliance on a concentrated group of mega-cap chip leaders.

Policy backdrop and foreign inflows

Easing trade tensions added another tailwind. During high-level meetings around last week’s APEC gathering, Korea and the United States finalized a trade package that included a reduction in US tariffs on Korean imports—lowering duties on autos and other goods to 15% from 25%. A thaw in trade frictions typically boosts risk appetite for exporters by improving earnings visibility and currency stability.

Supportive domestic policies have also helped. Investor sentiment has improved under President Lee Jae Myung’s market-friendly agenda, and foreign investors have responded. Since early July, global funds have bought about $12.8 billion of Korean equities, helping keep the KOSPI rally well funded. The index has even pushed above the 4,000 level that policymakers previously floated as an aspirational milestone, reinforcing the perception of Korea as a core AI hub rather than a cyclical afterthought.

Deals with Nvidia ripple across Korea

Nvidia’s latest initiatives with Korean partners go beyond headline logos. They point to a multi-layered pipeline that spans:

• Advanced memory, including high-bandwidth memory crucial for training frontier models.
• Foundry and packaging, where Samsung seeks to win share in cutting-edge nodes and chip-on-wafer technologies.
• Data center infrastructure, requiring power equipment, cooling, and grid upgrades—areas where Korean industrials are well positioned.
• Software ecosystems around autonomous driving and robotics, where Hyundai Motor and Naver have strategic interests.

This expanding web helps explain why the KOSPI rally has been so resilient. Each new partnership creates secondary and tertiary winners across Korea’s industrial base, sustaining earnings revisions and keeping multiples supported.

Analysts reset the playbook

The market narrative is undergoing a clear reset. For years, investors valued memory names as highly cyclical, using price-to-book ratios tied to trough earnings. That framework is being challenged by the AI investment wave, which is reshaping demand for high-bandwidth memory and specialized packaging.

By urging investors to adopt “a new multiple,” SK Securities’ Han captured a broader shift among strategists who say the KOSPI rally reflects a structural step-up rather than a temporary upcycle. If profitability through the cycle is higher, the sector’s fair valuation could be as well.

Still, the debate is far from settled. Some analysts caution that supply responses can be swift in memory, and that price discipline will be critical to maintaining margins. For now, earnings momentum and order visibility have the upper hand.

Breadth, liquidity, and technicals

Breadth indicators improved alongside price action. Gains extended beyond technology into autos, defense, and industrials, suggesting institutions were adding exposure across the board. Liquidity also remains strong as foreign investors continue to buy on up days, helping mitigate the risk of sharp reversals.

Technicians note that the KOSPI rally accelerated after breaking multi-year resistance, with pullbacks finding support at prior breakout zones. While momentum is stretched after October’s 20% surge, the index’s ability to hold higher lows has encouraged trend followers.

Voices from the market

• An Hyungjin, CEO of Billionfold Asset Management, described Monday’s strength as the “Jensen Huang effect,” noting that the Nvidia chief’s meetings in Seoul amplified optimism around Korea’s AI roadmap. The comment captured how executive-level engagement can catalyze flows in a market primed for AI exposure.
• Amazon’s Andy Jassy flagged plans to work with SK Hynix on next-wave technologies such as agentic AI, a signal that cloud majors are partnering more tightly with specialized chipmakers to secure capacity and accelerate innovation.
• Brokerage research highlighted the valuation shift underway. Upgraded targets for SK Hynix and Samsung emphasized durable demand for AI-enabling components rather than the short-cycle rebounds typical of past memory booms.

These reactions align with the broader thesis that the KOSPI rally is rooted in tangible orders, supply agreements, and policy support, not just headline-driven speculation.

Risks to monitor

Even strong bull phases come with risks. Investors are tracking:

• Supply expansion in memory could pressure pricing if demand growth slows.
• Global interest rate trends and currency volatility that affect foreign inflows.
• The durability of trade cooperation following the latest tariff reduction.
• Execution risk around large-scale data center and power grid projects.

Any stumbles in these areas could test the KOSPI rally, especially after a historic monthly gain that leaves sentiment elevated.

Why does this cycle look different?

Two structural differences stand out. First, AI workloads are still in an early innings buildout. Training and inference both require high-bandwidth memory, advanced packaging, and reliable power. That creates multi-year visibility for suppliers such as SK Hynix and system integrators across Korea.

Second, Korea’s corporate ecosystem is unusually integrated. From chips and foundry to autos, robotics, and digital platforms, Korean champions can collaborate quickly, shortening innovation cycles and distributing benefits. That integration is a key reason the KOSPI rally has radiated beyond a handful of tech mega caps.

What to watch next?

Investors tracking the KOSPI rally will focus on several near-term catalysts:

• Follow-through announcements from Nvidia’s Korea meetings, including specifics on orders, capacity buildouts, and delivery timelines.
• Guidance from Samsung and SK Hynix on capex and product mix, especially in HBM and advanced packaging.
• Updates on grid and data center investments that determine the pace of AI infrastructure growth.
• Any new steps by Seoul and Washington to maintain a stable trade environment and expand industrial cooperation.

Earnings season and management guidance will likely decide whether the next leg of the move is supported by fundamentals or pauses for consolidation.

Conclusion

The KOSPI rally has turned Korea into 2025’s standout equity story. Nvidia’s partnerships, rising confidence in the memory supercycle, and an improving policy backdrop have combined to lift stocks from chips to autos to defense. Foreign capital continues to flow, breadth is improving, and technicals remain supportive even after a stunning October.

Pullbacks are possible after such a steep climb, and risks around supply cycles and macro conditions persist. Yet the underlying message of the past month is clear: Korea has moved to the center of the AI buildout, and markets are repricing that reality.

If incoming orders, policy cooperation, and infrastructure spending stay on track, the KOSPI rally looks set to remain a defining theme for global investors navigating the AI era.

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Article Source: Bloomberg