Once-hot AI investment fervor fades, South Korean stock market faces a dearth of buyers.

BlockBeats news, October 11 — For most of this year, South Korea was a poster child for the global AI boom. Now, by almost every measure, Korean stocks are rapidly losing investor attention. Market turnover has plunged 70% from its peak in late May, foreign investors are fleeing quickly, and local retail investors in South Korea are also exiting. Behind this reversal is the Korean stock market's excessive reliance on Samsung Electronics and SK Hynix.

Phillip Wool, head of portfolio management at Rayliant Global Advisors, said: "I think for most investors, especially those who only recently entered the Korean market because of memory chip trades, the biggest challenge is that the easy money in this theme has already been made." He said his fund has been taking profits on Korean AI stocks and is currently underweight SK Hynix and Samsung Electronics.

Richard Tang of Julius Baer said: "We are observing that capital is increasingly flowing back to US stocks, which has led to continued foreign outflows from Korean stocks." Chun-Lai Wu of UBS Global Wealth Management said: "At present, we prefer to gain exposure to AI-related investment opportunities through Taiwan stocks; Taiwan has a more complete technology hardware ecosystem and benefits from strong spending plans by major tech companies."