JPMorgan Stays Bullish on Korean Stocks After 75% Leverage Unwind
South Korea’s KOSPI had been lifted by enthusiasm over artificial intelligence and memory chips, while growing use of leveraged ETFs left positioning increasingly crowded. JPMorgan said the subsequent selloff reflected forced deleveraging rather than a collapse in corporate fundamentals. The outlook remains closely tied to whether AI-related demand can sustain earnings across the memory-chip supply chain, led by Samsung Electronics and SK Hynix.
As of July 21, 2026, the KOSPI had fallen about 28% from its peak, while roughly 75% of leveraged ETF exposure had been unwound, according to JPMorgan’s assessment. The bank retained its overweight call and a 12,500-point target. Still, it said signs that the correction is nearing an end will depend on durable AI demand supporting Samsung Electronics, SK Hynix and their suppliers.
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The history behind this eventJPMorgan Eyes KOSPI at 15,000 on AI Hardware Cycle
South Korea’s stock market is heavily concentrated in semiconductor heavyweights such as Samsung Electronics and SK hynix. The KOSPI’s performance is therefore closely tied to cycles in memory chips, AI servers and data-center capital spending. JPMorgan believes AI hardware demand is translating into corporate earnings and continues to rank South Korea as its preferred market in Asia.
In its latest South Korea equity strategy report, published in July 2026, JPMorgan raised its 12-month base-case KOSPI target to 12,500. It recommended adding exposure on dips and maintaining its maximum overweight position. Its bull-case target is as high as 15,000, implying upside of about 77% from the index level used in the report.
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