Summary

• South Korea's KOSPI has transitioned from a discounted market to a leading AI infrastructure trade, driven by memory and semiconductor demand.
• KOSPI earnings are forecasted to grow 300% in 2026, with broad-based strength beyond Samsung and SK Hynix, while valuations remain attractive at 9x earnings.
• Despite a 197% rally and heightened volatility, disciplined, risk-managed exposure to Korea is warranted, favoring low-cost vehicles like FLKR.
• The U.S. AI trade faces margin compression from massive CapEx, but remains core for diversified AI exposure across hardware, software, and infrastructure.

The AI Trade Is No Longer Only An American Story

For many years, when discussing technology, it nearly always boiled down to discussing the United States. Nasdaq, S&P 500, Magnificent Seven, cloud, software, extremely high margins, asset-light models. That was where the trade belonged. The U.S. was the epicenter

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of FLKR, SPX either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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