Artificial intelligence (AI) is transforming the market capitalization landscape of stock exchanges in the U.S., South Korea, and Japan. Previously dominated by smartphone, internet platform, and automotive companies, the market is now led by AI semiconductor and memory firms.
In the U.S., Nvidia has overtaken Apple to become the world's largest company, while in South Korea, Samsung Electronics and SK Hynix are driving stock market gains. In Japan, memory manufacturer Kioxia Holdings is challenging Toyota Motor Corporation, climbing to the upper echelons of market capitalization.
According to the Korea Exchange, the KOSPI index reached 8,801.49 as of June 2, marking a 226.1% increase from a year earlier when it stood at 2,698.97. The surge in demand for AI semiconductors has propelled Samsung Electronics and SK Hynix, with their stock prices soaring by 534.7% and 1,037.3%, respectively, significantly outpacing the KOSPI's overall growth. As of June 2, these two companies accounted for approximately 52% of the KOSPI's market capitalization.
With the focus on AI benefiting the semiconductor sector, the status of these companies in the South Korean stock market has risen significantly. Once regarded primarily as a smartphone-centric IT company, Samsung Electronics has emerged as a key beneficiary of the expanding demand for memory semiconductors in the AI era. Recently, it has entered the top 10 global market capitalization rankings, competing with major tech giants.
SK Hynix's transformation is even more dramatic. As a key supplier of high-bandwidth memory (HBM) to Nvidia, it is now considered one of the biggest beneficiaries of the AI era. Analysts note that the company has shifted from being heavily influenced by the DRAM market to becoming a central player in AI infrastructure expansion. Just two years ago, SK Hynix was far outside the top 100 in global market capitalization but has recently climbed to 12th place, joining the ranks of leading global technology firms.
The positive outlook for the semiconductor sector is also boosting expectations for the South Korean stock market. Global investment bank Goldman Sachs recently raised its 12-month target for the KOSPI from 9,000 to 12,000, citing a longer-than-expected favorable semiconductor environment and improved corporate profit forecasts. This adjustment comes less than a month after the target was increased from 8,000 to 9,000.
While Samsung Electronics and SK Hynix lead the South Korean market, Nvidia is effectively dominating the U.S. market. Nvidia's market capitalization recently surpassed $5.2 trillion, making it the world's largest company. In 2017, Nvidia's market cap was approximately $117 billion, accounting for just 3.4% of the total market cap of the seven major U.S. tech companies (M7).
However, by virtually monopolizing the market for AI training graphics processing units (GPUs), Nvidia's value has skyrocketed. It now represents 22.5% of the total M7 market capitalization, a significant increase of about 6.6 times over nine years. This shift underscores how AI has completely altered the power dynamics of the U.S. stock market.
In Japan, AI is also shaking up the stock market landscape. The spotlight is on Kioxia Holdings, a NAND flash memory company. For a long time, Japan's stock market has been dominated by automotive and industrial firms, with Toyota Motor Corporation symbolizing Japanese manufacturing and holding the top market cap.
However, Kioxia's recent stock surge has disrupted this status quo. The company's shares recently rose by over 7%, pushing its market cap past 45 trillion yen at one point, allowing it to surpass Toyota and become the second-largest publicly traded company in Japan. Just a year ago, Kioxia was ranked 169th in market capitalization.
Market analysts believe that the changes brought about by AI in the stock market are unlikely to be temporary. Kim Young-geun, a researcher at Mirae Asset Securities, stated, "Kioxia is reducing its sensitivity to economic fluctuations by increasing its revenue share from data centers and establishing a stable profit structure through a disciplined supply strategy. This change will positively impact the entire memory sector." He maintained target prices for Samsung Electronics and SK Hynix at 550,000 won and 3,800,000 won, respectively.
* This article has been translated by AI.
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