Why it matters. South Korea is home to the world's two largest memory-chip makers, so bullish bets on the KOSPI are effectively a wager on the global AI and semiconductor cycle that ripples through tech supply chains everywhere.
Background. The KOSPI is South Korea's main stock index, and Samsung Electronics and SK Hynix together dominate the global memory-chip market, giving them outsized weight in it. 'Bitu' (literally 'debt investing') refers to buying shares with borrowed money, a practice that surged among Korean retail investors and is closely tracked via margin-loan balances. P/E, or price-to-earnings ratio, measures how expensively a market is valued relative to profits.
What to watch next. Watch fourth-quarter risks flagged by analysts — U.S. political uncertainty and stretched valuations — plus any Korea visit by Nvidia's Jensen Huang that could fuel the AI-linked rally.
Brokerages pile into the bull case
A wave of brokerages and global investment banks moved on June 4 to sharply raise their targets for the KOSPI, South Korea’s benchmark stock index, with Korea Investment & Securities lifting its second-half ceiling to 11,000 and Goldman Sachs setting a 12-month target of 12,000 — citing a semiconductor earnings boom led by Samsung Electronics and SK Hynix. The upgrades push the index, currently trading below those levels, firmly into bullish territory and put the symbolic 10,000-point mark within reach.
Korea Investment & Securities, one of the country’s largest domestic brokerages, raised its second-half KOSPI range to 8,000–11,000, up from a previous high of 9,250. Analyst Kim Dae-jun pointed to corporate profits as the key driver. “Semiconductors riding a super cycle are generating enormous profits and supporting the index,” he wrote, estimating that the combined 12-month operating profit of Samsung Electronics and SK Hynix — the world’s two largest memory-chip makers — will come in about 10% higher than earlier forecasts.
His math rests on valuation. The firm set a second-half target price-to-earnings (P/E) ratio of 9.5, against a current 12-month forward P/E of 8.5, arguing both rising earnings and an expanding valuation multiple will lift the index. On the downside, Kim said that if earnings momentum weakened by 10% while the multiple held, the KOSPI could bottom out near 7,900.
Goldman goes furthest
Goldman Sachs was the most aggressive. In a report the same day, the bank raised its 12-month KOSPI target to 12,000 from 9,000 — a 36.3% jump in just one month. Goldman argued that Korean chip shares, trading at a forward P/E of about 5, are cheap and that the current cycle “will last longer than past cycles.”
Notably, Goldman’s optimism extends beyond the two chip giants. Excluding Samsung and SK Hynix, the bank said its 2026 profit-growth forecast for the rest of corporate Korea has risen from 20% in January to 57% now, calling the country “by far the best performer” in Asia. Samsung Securities had already raised its KOSPI ceiling for the year to 11,000 from 8,400 in late May.
Where the outlooks diverge is on timing and risk. Korea Investment & Securities expects gains through the second and third quarters but a sideways drift in the fourth, warning that U.S. election uncertainty and supply-demand instability could sap investor sentiment late in the year. Reporting by Kyunghyang Shinmun also flagged unresolved tensions tied to a U.S.–Iran conflict and the possibility of further interest-rate increases as lingering headwinds.
Bullish, but wary of leverage
Private bankers told Kyunghyang Shinmun that this is not the moment to retreat into cash or bonds, but they drew a firm line at borrowing to invest. “Right now the market is moving on expectations for the earnings of Samsung Electronics and SK Hynix rather than the broader economy,” said Yoon Jong-yeon of Hana Bank, adding that he would cut exposure only if chip earnings fell or hyperscalers — the largest cloud operators — canceled long-term contracts.
Several advisers framed the rally as an all-in bet on artificial intelligence spanning chips, robotics and cloud computing. Park Yang-seo of Shinhan suggested that a visit to Korea by Nvidia CEO Jensen Huang could channel money toward Naver (cloud) and LG and Hyundai Motor (humanoid robots), and recommended index-linked products as a way to ride the theme.
The recurring caution was “bitu” — a popular Korean term for buying stocks with borrowed money. According to the Korea Financial Investment Association, margin-loan balances reached more than 37.68 trillion won (roughly $27 billion) as of June 1. The danger, advisers noted, is that leveraged investors can be force-sold during a downturn, magnifying losses. “Investors who have just entered the market are taking a risk if they don’t account for declines,” said Shin Yun-a of Woori Investment & Securities.
