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Kospi dips nearly 2% as AI bubble worries resurface

Published: 15 Dec. 2025, 17:18 Updated: 15 Dec. 2025, 19:23

YOON SO-YEON
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A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 4,090.59 points on Dec. 15, down 76.57 points, or 1.84 percent, from the previous trading session. [YONHAP]

Shares dipped almost 2 percent on Monday, as the concerns of an AI bubble that shook U.S. tech stocks last week spilled over to the Korea Exchange. The won strengthened against the dollar, but foreign and institutional buyers sold off, taking a toll on major Korean tech stocks.

The benchmark Kospi fell 76.57 points, or 1.84 percent, to close at 4,090.59. Trade volume was moderate at 344 million shares worth 15.3 trillion won ($10.4 billion), with losers outnumbering winners 529 to 350. Foreign investors and institutions unloaded local shares worth 957 billion won and 474 billion won, respectively, while retail investors purchased 1.4 trillion won.

The local stock market came under selling pressure amid renewed concerns over the profitability of U.S. tech companies' investments into AI, triggered by the disappointing AI margins outlook of Broadcom and Oracle.

Last week, Broadcom revealed the company's consensus-beating third quarter earnings but still saw its shares nose-dive 11 percent -- the company's worst loss since January -- after CEO Hock Tan revealed that the firm doesn't "expect much in 2026" from its major AI customer, OpenAI, in terms of revenue.

Oracle's shares also plummeted by more than 40 percent compared to its September peak — also despite consensus-beating earnings — exacerbated by the company's chief technology officer, Larry Ellison, who cautioned, "There are going to be a lot of changes in AI technology over the next few years, and we must remain agile in response to those changes."

"Concerns surrounding an AI bubble re-emerged right after the financial market digested the December meeting of the U.S. Federal Open Market Committee, which was favorable to the market," Lee Kyoung-min, an analyst at Daishin Securities, said. The committee decided last week to lower the key rate by 0.25 percentage points to the 3.5 to 3.75 percent range.

Broadcom CEO Hock Tan speaks as President Donald Trump listens during an event on Nov. 2, 2017, in Washington. [AP/YONHAP]

Oracle logo [REUTERS/YONHAP]

On Friday, U.S. stocks were also dragged down by tumbling tech shares, with the tech-heavy Nasdaq composite down 1.7 percent, the Dow Jones Industrial Average giving back 0.5 percent and the S&P 500 dropping 1.1 percent.

In Seoul, top-cap Samsung Electronics plummeted 3.76 percent to 104,800 won, and chipmaking rival SK hynix slid 2.98 percent to 554,000 won. AI investment firm SK Square slipped 5.03 percent to 292,500 won.

Defense giant Hanwha Aerospace shot down 5.52 percent to 908,000 won, and power plant manufacturer Doosan Enerbility went down 3.26 percent to 77,100 won. Top automaker Hyundai Motor pulled back 2.65 percent to 293,500 won, and auto parts-making subsidiary Hyundai Mobis contracted 3.44 percent to 364,500 won.

In contrast, local metal producer Korea Zinc vaulted 4.87 percent to 1.59 million won on reports that the company is seeking to jointly invest with Washington in building a critical metal refinery in the United States. Samsung Biologics escalated 4.73 percent to 1.77 million won, and secondary battery maker Posco Future M gained 2.48 percent to 227,000 won.

The local currency was quoted at 1,471 won against the greenback at 3:30 p.m., down 0.18 percent from the previous session's close of 1,473.7 won.

Bond prices, which move inversely to yields, ended higher. The yield on three-year Treasurys plummeted 9.3 basis points to 3 percent, and the return on the benchmark five-year government bonds shed 9.1 basis points to 3.259 percent.

BY YOON SO-YEON, YONHAP [[email protected]]