South Korea’s AI Bubble Just Popped — America Could Be Next

Take your personal data back with Incogni! Use code GRAHAM at the link below and get 60% off an annual plan: https://incogni.com/graham | Let's discuss the South Korea Stock Market AI Bubble, Why Prices Are Falling, and Similarities In The United States - Enjoy! Add me on Instagram: GPStephan START BUILDING WEALTH WITH MY FREE NEWSLETTER: https://grahamstephan.substack.com SOUTH KOREA'S MARKET CRASH: COULD THE U.S. BE NEXT? South Korea's stock market recently suffered its fastest and largest decline on record after falling more than 20% in just a few weeks. The concern is that many of the same ingredients behind that crash now exist in the United States, including heavy AI concentration, record valuations, rising leverage, and widespread investor optimism. WHAT CAUSED KOREA'S COLLAPSE The KOSPI had become heavily concentrated in just two semiconductor companies, Samsung and SK Hynix, which accounted for more than half the index. After regulators approved leveraged single-stock ETFs, retail investors poured billions into products that magnified gains and losses. When regulators later warned the market had become overheated, selling accelerated. Falling stock prices forced leveraged funds to sell even more shares, creating a self-reinforcing downward spiral that quickly erased months of gains. WHY INVESTORS ARE COMPARING THE U.S. The U.S. market shares several characteristics with Korea. The largest ten companies now account for roughly 37% of the S&P 500, technology dominates the index, valuations rank among the highest in history, and margin debt has climbed to record levels. Professional investors also hold unusually low cash balances, while corporate insiders are selling shares at an elevated pace. Although none of these factors guarantees a decline, they suggest the market is increasingly dependent on a relatively small group of companies continuing to perform exceptionally well. THE BULL CASE Wall Street remains broadly optimistic. Goldman Sachs, Morgan Sta