As the domestic stock market continues to boom amid the artificial intelligence (AI) semiconductor boom, warnings about a potential “end signal” for the bull market have emerged from the securities industry. The key variable identified is whether SK hynix will overtake Samsung Electronics in market capitalization. While the current upward trend based on improved earnings is solid, analysts note that if excessive capital is concentrated in a particular stock, it could signal that the market has entered an overheated phase.

On the 15th, when the KOSPI index surpassed 8,000 intraday for the first time in history, the screens at the Hana Bank dealing room in Jung-gu, Seoul, displayed the domestic stock market index.

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According to a Hana Securities report released on May 20, Jaeman Lee, a researcher at Hana Securities, stated, "The signal for the current bull market, which is based on rising corporate profits, will be triggered the moment SK hynix's market capitalization surpasses Samsung Electronics."

This assessment focuses less on the simple change in market capitalization rankings and more on situations where market expectations far outpace actual corporate performance. Generally, market capitalization is determined by profit-generating ability, but when expectations for a specific stock become excessive, a gap can emerge between expectations and real performance. In other words, if a market capitalization reversal materializes, it could be interpreted as a signal that excessive optimism has been priced into the overall market.

The Asia Business Daily Database

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In particular, Lee cited the 2000 dot-com bubble as evidence. At that time, the U.S. network equipment company Cisco Systems overtook Microsoft and GE to become number one in market capitalization, but its actual profits were much lower than those of its competitors. Ultimately, the stock price surge, which was driven more by expectations than by performance, led to the collapse of the bubble. The securities industry views this as a "typical progression of market overheating."

However, Hana Securities believes that the current domestic stock market has not entered this phase. That is because Samsung Electronics still leads SK hynix by a significant margin in terms of profit. According to Hana Securities, Samsung Electronics is expected to maintain its dominance in both 2026 and 2027 projected net profits.

Nevertheless, SK hynix's influence in the market is expanding rapidly. Currently, SK hynix's share of KOSPI market capitalization stands at about 22%, an all-time high, and the gap with Samsung Electronics has narrowed considerably. The report pointed out that if a market capitalization reversal does occur in the future, it could be interpreted as a sign of market overheating, making risk management crucial for investors.

Yonhap News Agency

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