South Korea's KOSPI Rallies Again as Nvidia's Multibillion-Dollar Deals Lift Samsung, SK Hynix This Week

South Korea's benchmark stock index climbed further Monday, extending a volatile but historic year for the country's equity market as fresh multibillion-dollar partnership announcements between Nvidia and South Korea's two largest chipmakers reignited investor enthusiasm for the AI-driven rally that has defined 2026.

A strong open to the week

The Kospi Composite Index rose 1.05%, or 70.24 points, to trade at 6,760.86 as of Monday afternoon in Seoul, according to trading data. The index had opened even more sharply higher earlier in the session, touching an intraday high above 6,800 points before paring some of its gains. The rally was led once again by South Korea's dominant memory-chip makers, Samsung Electronics and SK Hynix, both of which posted solid gains as investors digested a wave of AI infrastructure announcements unveiled over the weekend.

Nvidia's Korea push fuels the latest leg higher

Monday's gains followed a series of major deals announced Friday during a summit hosted by South Korean President Lee Jae Myung in San Francisco, where Nvidia agreed to invest $1 billion in internet giant Naver to help expand an AI data center in Sejong, while separately unveiling a broader partnership with SK Group valued at more than $500 billion in combined business over time. Naver shares had initially tumbled on the announcement amid investor concerns about financing and dilution, but the broader chip sector rallied Monday as SK Hynix and Samsung extended gains tied to the underlying demand story: continued global appetite for the memory chips that power AI data centers.

A year of extraordinary, volatile gains

Monday's advance adds to what has already been one of the most remarkable runs in the Kospi's history. The index has surged roughly 100% year-to-date at various points in 2026, a pace that briefly surpassed even the historic run-ups seen before the dotcom bubble burst in the late 1990s and during South Korea's industrial boom in the late 1980s. The rally carried the index from around 5,000 points in January past the symbolic 7,000-point threshold by May, and briefly above 9,000 points at its peak, before a sharp pullback in recent weeks brought the index back down into the 6,500-to-6,800 range.

That volatility has become a defining feature of the Kospi's 2026 story. In early July, the index suffered a nearly 10% decline over two trading sessions after Samsung and SK Hynix shares tumbled amid concerns about potential overcapacity in the memory chip industry, only to stage a 5.8% single-day rebound after a report indicated Anthropic was in talks with Samsung to co-develop a custom AI chip. Citigroup analyst Peter Lee, addressing concerns about the sector's fundamentals during that earlier bout of volatility, said he believed the underlying memory chip market remained sound. "We believe memory fundamentals are intact and server DRAM pricing has been outperforming on strong CPU demand," Lee said, an assessment that helped underpin his decision to raise Samsung's operating profit forecast for the year.

Analysts flag concentration risk even as targets rise

Despite the volatility, major global banks have continued to raise their outlooks for the Korean market. Goldman Sachs lifted its 12-month Kospi target to 9,000 in May, with strategists led by Timothy Moe describing South Korea as the firm's top regional pick. "Korea is our highest-conviction view," Moe wrote, citing the country's exposure to a memory chip supercycle the firm expects to be driven by AI-related demand for years to come. Goldman has forecast 2026 earnings growth of roughly 300% for the Korean market, which it has described as the strongest annual profit expansion in any major Asian market since the country's recovery from the 1997-98 Asian financial crisis.

Still, some market technicians have warned that the rally's gains have become increasingly concentrated in a small handful of stocks. Jonathan Krinsky, chief market technician at BTIG, flagged that pattern during an earlier stretch of the rally, noting that the index's advances had been driven by a narrow group of heavyweight names even as broader market participation lagged. "Over the last six sessions, the KOSPI is up 12.15%," Krinsky said at the time, cautioning that such gains can look different beneath the surface when just a few companies make up roughly half of the index's total weight.

Chip giants remain the dominant story

Samsung Electronics and SK Hynix together account for a substantial share of the Kospi's total market capitalization, meaning their fortunes have effectively set the tone for the broader index throughout the year. Both companies have posted dramatic earnings growth tied to surging demand for high-bandwidth memory chips used in AI servers and data centers, with brokerages repeatedly revising profit forecasts higher as pricing for server DRAM has outperformed expectations. SK Hynix has separately drawn investor attention over a planned U.S. listing, while Samsung has continued ramping up production of next-generation HBM4 memory chips destined for Nvidia's AI accelerator lineup.

A market shaped by government ambition as well as AI demand

Beyond corporate earnings, South Korea's government has played an active role in shaping investor sentiment this year, with President Lee's administration pushing a series of large-scale industrial initiatives aimed at cementing the country's position in the global AI supply chain. Those efforts, including the roughly $950 billion package of chip and infrastructure deals unveiled alongside Friday's Nvidia announcements, have added a policy-driven dimension to a rally already fueled by global chip demand, even as some analysts have raised questions about how some of the government's headline investment figures were calculated.

With Samsung's next earnings report and continued updates on the Nvidia, Naver and SK Group partnerships likely to remain in sharp focus, investors are expected to keep watching closely for signs of whether South Korea's chip-driven rally can sustain its momentum or whether the sharp swings seen throughout 2026 will continue to define the market in the months ahead. For now, Monday's gains offered another reminder of how tightly the fortunes of South Korea's stock market remain tied to the global AI investment boom and the handful of companies at its center.