SK hynix surged on Friday alongside other South Korean shares as traders flooded back into artificial-intelligence stocks. That's a short-term relief for the AI trade but the level of volatility is a long-term worry.

SK Hynix rose 30% to 1.718 million won ($1,197) in local trading in South Korea. Its peer Samsung Electronics climbed 27%, with the two memory-chip heavyweights contributing to an 18% gain for the country's benchmark KOSPI Composite Index overall.

The KOSPI has been the world's hottest stock market so far this year -- logging a 57% gain through Friday's close -- but it has been an uncomfortable ride at times. Three of the index's four biggest one-day declines in the past decade happened in the past five weeks, according to LSEG data.

Korean retail investors have been piling into SK Hynix and other technology stocks, with increasing use of aggressive tools such as leveraged exchange-traded funds. Leveraged ETFs own options, swaps, or other derivatives to enhance the daily moves -- up or down -- for the stock. They amplify downward moves because losses need even larger gains to get back to even and their need to rebalance at the end of each day erodes returns.

There had been hopes that the recent slump in AI stocks, as well as regulatory and political pressure in South Korea, would reduce the use of leverage and therefore result in more stability for the market overall. However, huge moves like those seen on Friday in SK Hynix and Samsung stocks suggest Korean investors still have cash to deploy, which risks causing more volatility down the line if they pump that back into leveraged ETFs in order to try to recoup their losses.

Still, that's not necessarily a reason to stay away from SK Hynix's American depositary receipts, which were up 5.9% at $158.07 in premarket trading Friday (10 ADRs represent one underlying share).

SK Hynix's ADRs trade at a significant premium to the underlying shares in South Korea due to the size of the U.S. investor base and obstacles to converting between the two instruments. Barron's has written positively about the ADRs, suggesting they offer a cheaper way to play the memory-chip boom than U.S.-based Micron.

The sale of the bulk of the stock portfolio of Situational Awareness, the AI-focused hedge fund led by Leopold Aschenbrenner, could also clear the way for more gains in SK Hynix's ADRs. Situational Awareness had a big position in SK Hynix and was under pressure to raise cash, potentially through the sales of holdings, in recent weeks according to The Wall Street Journal.