South Korea stocks have entered bull market in about a month as AI trade roars back

South Korean stocks rallied Thursday, lifting the benchmark Kospi into a technical bull market as a global revival in the AI trade fuels a sharp recovery after last month's historic sell-off. Investor appetite for technology hardware stocks is returning as the latest earnings from.

The latest leg of the Kospi's rebound has been fueled by renewed optimism over artificial-intelligence spending, helping revive interest in South Korea's heavyweight semiconductor stocks. Supermicro and cloud provider CoreWeave surged overnight following better-than-expected results.

What Happened

The developments have provided a fresh boost to Korean chipmakers, whose fortunes are closely tied to demand for the memory chips used in AI infrastructure. Samsung Electronics and SK Hynix have led the Kospi's advance, extending a sharp rebound from last month's.

• The Kospi jumped over 4% in early trade, taking its rebound from its July 30 low to roughly 23%, data from LSEG showed.

• Index heavyweights Samsung Electronics and SK Hynix led the gains, with the chip giants rising over 4% and 7%, respectively.

• For now, however, he said South Korea and memory stocks "look to be the right vehicles for near-term risk-on exposure."

Key Details

The rally in South Korean stocks has room to run further as strength returns to the country's heavyweight memory chipmakers, according to Fundstrat Global Advisors. Mark Newton, the firm's head of technical strategy, said the iShares MSCI South Korea ETF has broken.

• Treasury yields and the dollar begin climbing again.

• Newton remains bullish on the market in the near term, although he cautioned that the rally could lose momentum later this month if U.S.

• Fundstrat said the combination of South Korea's rebound and the recovery in memory chips is broadening a rotation back into technology, even as some major U.S.

Why It Matters

The ETF's latest move confirmed a reversal pattern that Newton said "looks attractive technically for further near-term gains." The bigger signal may be coming from memory stocks themselves.

• That matters for South Korea given the outsized influence of Samsung and SK Hynix on the country's equity market.

• After being among the hardest hit during the recent technology sell-off, memory shares are beginning to outperform the broader tech sector for the first time since June, Fundstrat said.

What Reports Say

Coverage of the story so far points to:

• Continued reporting by CNBC as more details emerge