Analyst Dan Ives stated that South Korean stocks could reach historic highs within the next 6 to 12 months as concerns over artificial intelligence (AI) trigger excessive selling.
The Yorkville Ives partner and senior managing director is bullish on further upside for South Korean semiconductor companies, expecting US tech stocks to rally through 2029, and revealed his top five stock picks for 2027.
KOSPI Selloff Creates Buying Opportunity; Samsung and SK hynix Undervalued
"South Korea reminds me of Silicon Valley in the mid-1990s," Ives said Wednesday at a press conference in Seoul.
He added that global AI investment remains in its early stages, and investors are underestimating the role of South Korean companies in the AI ecosystem.
Ives expects the KOSPI to recover to around 9,000 points within the next 6 to 12 months.
"Four years ago, small financial institutions on Wall Street didn't even know what the KOSPI was, but now even New York taxi drivers know," Ives said.
However, the index turned lower on Wednesday after rising as much as 2.6% earlier in the session.
Korea-focused exchange-traded funds (ETFs) also came under pressure. Direxion Daily South Korea Bull 3X Shares (KORU.US) fell more than 4% in premarket trading, while the iShares MSCI South Korea ETF (EWY.US), which tracks large- and mid-cap Korean stocks, dropped 1.3%.
Ives believes that South Korean semiconductor giants SK hynix (SKHY.US) and Samsung Electronics (SSNLF.US) are undervalued relative to their fundamentals.
Ives also pushed back against concerns about capacity expansion and technological progress by Chinese memory chip manufacturers, including ChangXin Memory Technologies.
He stated that South Korean companies are at least three years ahead of their Chinese competitors.
He acknowledged that China could narrow the gap and eventually develop competitive solutions, but said worries about Chinese competition hurting South Korean memory chip companies are exaggerated.
Nasdaq Could Reach 35,000 by 2029; Ives Reveals Top Five Tech Stocks for 2027
Ives also predicted that large US tech stocks could see valuations rise by an average of 30% by 2029 as AI investment expands.
"The fourth industrial revolution led by AI is only about 15% complete," he said, adding that the Nasdaq could reach 35,000 by 2029.
The tech-heavy index closed at 27,204.38 on October 13. Reaching that level would imply a potential gain of about 29.6% over the next three years.
Looking ahead to 2027, Ives named Nvidia (NVDA.US), Microsoft (MSFT.US), Palantir (PLTR.US), Apple (AAPL.US), and CrowdStrike (CRWD.US) as his top five tech stock picks.
He also expressed optimism about Tesla (TSLA.US) and SpaceX (SPCX.US), predicting an 80% probability that the two companies will merge within the next 12 months.
"Musk's plan is to bring all AI companies under one roof, and that entity would become the world's largest hyperscaler," Ives said.
South Korean stocks have surged this year, with the KOSPI up more than 42% year-to-date.
Similarly, the iShares MSCI South Korea ETF has gained about 70%, while Direxion Daily South Korea Bull 3X Shares has risen more than 59%.
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