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The AI semiconductor rally led by Samsung Electronics and SK Hynix has pushed the two stocks' combined gains past levels seen during the dot-com bubble, prompting analysts to ask whether there is still room to run.
According to KB Securities, the combined share price of Samsung Electronics and SK Hynix had risen 798 percent from its lowest point within the past 500 trading days as of June 1 — surpassing the 717 percent gain recorded during the dot-com bubble.
KB Securities analyst Kim Min-gyu said the intensity of the current rally in Korea's semiconductor sector "has entered territory never seen before in history."
Kim said the current semiconductor rally looks less like a simple case of overheating and more like a phase that extends the lifespan of market-leading stocks. Historical market cycles show that bubbles have often prolonged the dominance of leading stocks, creating periods of extraordinary outperformance. Solid earnings and sustained buying by retail investors add to the case that the uptrend could continue for now, he said.
However, Kim cautioned that "while leading stocks often post historic outperformance during bubble phases, the market will not easily allow additional gains."
The report noted that rallies tend to be smooth and rapid in their early stages but grow increasingly volatile in the middle and later phases. The dot-com bubble saw sharp swings in volatility during its run-up, and a similar pattern is now being observed, the report said.
Kim said investors should watch for early warning signs of a bubble collapse — including an economic slowdown, an irreversible rise in interest rates, and funding failures among AI companies. "There still appears to be time before any of these warning signs materialize," he said.
Meanwhile, market interest in the semiconductor sector remains high, with brokerages continuing to raise their price targets. Earnings forecasts for Samsung Electronics and SK Hynix have been revised upward in succession, driven by expanding AI server investment and surging demand for high-bandwidth memory, or HBM.
SK Securities raised its price targets for Samsung Electronics and SK Hynix to 610,000 won (about $404) and 4 million won, respectively, citing the structural growth of the HBM market.
Citi set the highest target for SK Hynix at 4.5 million won, calling the company "the irreplaceable heart of global AI infrastructure."
KB Securities and Mirae Asset Securities set their SK Hynix targets at 4.3 million won and 4.1 million won, respectively, joining the cluster of forecasts in the 4-million-won range.
For Samsung Electronics, KB Securities issued a strong buy recommendation with a target of 650,000 won, while Goldman Sachs set its target at 630,000 won, Korea Investment & Securities at 620,000 won, and Mirae Asset Securities at 600,000 won.
yeonjoo7@heraldcorp.com
