Key Takeaways
Nomura Securities substantially raised its 2026 forecast for South Korea's KOSPI index to a range of 10,000 to 11,000 points, citing an artificial intelligence-driven memory chip supercycle.
"AI-driven revenue, including businesses such as memory chips, power equipment, energy storage systems, and nuclear energy, will deliver sustainable returns on net assets over the next five years," Nomura Securities analysts stated in a report released May 20.
The new forecast is a significant increase from the previous 7,500-8,000 point range. The firm's highly bullish outlook includes a new price target of KRW 4 million for SK Hynix and KRW 590,000 for Samsung Electronics. Based on prices at the time of the report, these targets imply potential upsides of over 100% and nearly 100%, respectively.
The report suggests the surge in demand for both commodity memory and high-bandwidth memory (HBM) will be the primary engine for earnings growth and return on equity for the index's constituents through 2027. The 11,000-point target represents a 53% increase from recent closing prices.
Beyond the semiconductor cycle, Nomura identified several other factors supporting a higher valuation for Korean equities. The report cited the government's push for corporate governance reforms, including mandatory disclosure of target return-on-equity and measures to improve capital efficiency and shareholder returns.
Analysts also pointed to the potential inclusion of South Korea in the MSCI World Index as a developed market and policies aimed at revitalizing the small-cap KOSDAQ market as additional catalysts that could attract foreign investment. The report also noted defense and automobiles as other promising industries, with autos transforming into "physical AI and autonomous driving platforms."
The bullish report contributed to a rally in related Hong Kong-listed exchange-traded funds. The XL2CSOPSMSN ETF, which tracks Samsung, gained over 13%, while the XL2CSOPHYNIX ETF tracking SK Hynix jumped nearly 18% in the following session.
The aggressive forecast from Nomura reinforces the narrative that the AI boom is creating a structural shift in demand for memory semiconductors. Investors will now watch for earnings from SK Hynix and Samsung to see if the expected acceleration in HBM-related profits materializes.
This article is for informational purposes only and does not constitute investment advice.
