The volatility of South Korea's benchmark stock index has become so extreme that investors and analysts compare intraday market swings to the frenzy of meme stocks.
While this comparison may sound exaggerated at first, given that the KOSPI is supported by strong earnings from global leading chipmakers, it is not unreasonable. Growing interest from retail investors has led to the benchmark index closing with at least a 5% change 20 times this year, including a 10% drop on Tuesday, compared to only twice in 2025. This reminds people of the frenzy around GameStop Corp. and Bed Bath & Beyond Inc. in 2021, when they became targets of retail investor mania.
The KOSPI surged 6% again on Thursday, as optimistic forecasts from Micron Technology reignited confidence in the AI industry.
A major factor driving the surge in market volatility is retail investors heavily buying leveraged single-stock ETFs. Additionally, the growing dominance of the two largest stocks, Samsung Electronics and SK Hynix, also boosts volatility: currently, they account for nearly 60% of the KOSPI's total market cap.
'Coming into 2026, the KOSPI is beginning to show meme-like strong movements,' said Hebe Chen, market analyst at Vantage Global Prime in Sydney. 'Samsung and SK Hynix have enormous influence, and leveraged products mechanically amplify every move in the market. With too few targets for capital in this market, every fluctuation in AI sentiment can quickly escalate into an index-level event.'
