In a remarkable turn of events, SK Hynix has capitalized on the AI rally, overtaking Samsung Electronics to become the new leader of the KOSPI index. This marks the first change in the index's top position in 26 years, with SK Hynix surpassing Samsung by approximately 14 trillion won.
As of market close on June 22, the market capitalizations of SK Hynix and Samsung Electronics were reported at 2,080.38 trillion won and 2,066.66 trillion won, respectively. SK Hynix saw its market cap exceed 2,000 trillion won for the first time at 9:30 a.m. that day, continuing to rise by over 5%, while Samsung's stock increased by only about 0.5%, resulting in a shift in their rankings. However, when including Samsung's preferred shares, valued at 179.73 trillion won, Samsung still holds the top position in market capitalization.
This shift is historically significant for the South Korean stock market, as it is the first time since November 2000 that Samsung Electronics has relinquished its position as the KOSPI leader. At that time, Samsung briefly lost the top spot to SK Telecom but reclaimed it on November 21 of the same year, maintaining its dominance for over 25 years.
Just a few months ago, the gap between the two companies was substantial, with Samsung's market cap exceeding SK Hynix's by more than 525 trillion won at the end of February. However, as the AI investment boom intensified, SK Hynix's stock surged, rapidly narrowing the gap. By June 19, the difference in market capitalization had shrunk to approximately 99.7 trillion won, leading to this historic reversal.
The stock performance also highlights the disparity between the two companies. Since the beginning of the year, Samsung's shares have risen by 175%, while SK Hynix's shares have skyrocketed by 331%. Compared to a year ago, Samsung's stock has increased by about 494%, while SK Hynix has surged by 1,036%, widening the gap further. Analysts attribute this trend to increased investment in AI by major global tech companies, directing funds toward SK Hynix, a leader in the HBM market.
Market analysts expect both companies to continue showing strong performance improvements. Target prices for their stocks are being raised, with Samsung's highest target set at 610,000 won and SK Hynix's at 4.3 million won, suggesting potential increases of about 73% and 47%, respectively, from their current closing prices.
There are also predictions that SK Hynix may hold its market cap lead for an extended period due to its dominance in the HBM market and its upcoming listing of American Depositary Receipts (ADRs). ADRs are securities that represent shares in foreign companies and are traded on U.S. exchanges, enhancing accessibility for American investors and expanding the supply base.
Park Jun-young, an analyst at Hanwha Investment & Securities, stated, "SK Hynix is transforming from a memory company with extreme profit volatility into a firm capable of generating consistently high profits based on long-term supply contracts and HBM technology. It is necessary to apply a valuation of at least 10 times the forward price-to-earnings ratio (P/E) used for global semiconductor companies."
* This article has been translated by AI.
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