South Korea's stock market mounted an epic comeback on Friday after a brutal sell-off in the first three trading days of the week, with the benchmark KOSPI index surging as much as 14% intraday, marking its largest single-day gain ever. Tech giants SK hynix and Samsung Electronics led the rally, soaring 28% and 26%, respectively. This dramatic reversal was fueled by renewed confidence in the global AI investment narrative and a rare "bottom-fishing" signal from the group's chairman, which temporarily quelled the liquidity crisis triggered by high leverage.

Dual catalysts ignited the rebound: from a "deleveraging stampede" to "confidence injection." Early this week, the KOSPI index had plunged into a technical bear market, collapsing 17% in just three sessions. The core triggers were twofold: deep market skepticism about the returns on massive AI capital expenditures by global tech giants and growing concerns over intensified competition from Chinese memory chips. Additionally, the introduction of leveraged products in May amplified volatility, forcing high-leverage funds into a "decline-liquidate-further decline" death spiral. However, sentiment on Friday reversed 180 degrees. Overnight, strong earnings from U.S. cloud computing giants like Microsoft, along with emergency capital infusions from Wall Street, provided a powerful rebuttal to the "AI bubble burst" theory, reigniting confidence in long-term AI infrastructure investment. Domestically, a highly symbolic protective move emerged: the chairman of SK Group, Chey Tae-won, directly purchased 3,620 shares of SK hynix in the open market, totaling about 4.79 billion won (approximately $3.2 million). This marks the first time Chey has personally held shares in the company; previously, he held indirect stakes through the holding company SK Square. The market widely interprets this as a strong endorsement of the company's long-term value, particularly its high-bandwidth memory business, and a signal that the stock was severely undervalued after the crash.

Market fundamentals and outlook: rebound or reversal? Despite the strong rally, deep-seated structural issues remain. Shawn Oh, head of equities at NH Investment & Securities, noted, "The recent accelerated sell-off in AI tech stocks, driven by deleveraging, risk reduction, and liquidation, is likely stabilizing." Data shows that with stock prices halved, foreign capital is returning to the more attractively valued Korean market, while regulators have begun to limit retail investors' exposure to single-stock leveraged ETFs, aiming to curb extreme volatility from excessive leverage in the future. From an industry perspective, Samsung Electronics and SK hynix still firmly hold the core supply position in AI memory chips. While SK hynix's second-quarter earnings hit a record high, they slightly missed market expectations, suggesting that high valuations require stronger performance to justify. Analysts believe this rebound is more of a technical correction from deep oversold conditions and a relief from the liquidity crisis, rather than a full trend reversal. The KOSPI's future stability will remain highly dependent on the capital expenditure guidance of global tech giants and the cyclical trends in memory chip prices.