The South Korean stock market is nearing a long-sought milestone after experiencing one of its most volatile weeks in years: a potential path to being classified as a developed market by MSCI Inc.

So far this year, the benchmark KOSPI index has been one of the world's top-performing major equity gauges, surging over 90% as investors flock to leading companies in the artificial intelligence sector. However, this rally has also made South Korean stocks among the most volatile globally. The index has triggered circuit breakers multiple times recently, with volatility soaring to levels rarely seen in other major global indices.

Investors are now awaiting MSCI Inc's annual market classification review on June 23rd, when the index provider will decide whether South Korea can finally be placed on the watchlist for developed markets, the first step towards a potential upgrade.

Among fifteen investors and strategists surveyed, the majority expect MSCI Inc to keep South Korea in the emerging market category for now, arguing that recent reforms need more time to prove their sustainability. However, few question the country's overall trajectory.

"It's only a matter of time," said Young Jae Lee, a senior investment manager at Pictet Asset Management. "South Korea will become a developed market within the next few years at least. That is my base case."