The once red-hot AI investment boom has cooled, and South Korea's stock market is facing a shortage of buying interest.

For most of this year, South Korea has been a standout in the global AI boom. Now, by nearly every metric, South Korean stocks are quickly losing investor attention. Market turnover has plummeted 70% from its late-May peak, foreign investors are fleeing rapidly, and local South Korean retail investors are also exiting. Behind this reversal is South Korea’s stock market’s over-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 recently entered the South Korean market via memory chip trades, the biggest challenge is that the easy money from this theme has already been taken off the table.” He added that his fund has been taking profits on South Korean AI stocks and is currently underweight SK Hynix and Samsung Electronics. Richard Tang of Julius Baer said: “We have observed that capital is increasingly flowing back to U.S. stocks, which has led to sustained foreign outflows from South Korean equities.” Chun-Lai Wu of UBS Global Wealth Management said: “Currently, we prefer to access AI-related investment opportunities through Taiwan stocks; Taiwan has a more mature tech hardware ecosystem and benefits from strong spending plans of major tech companies.”