[2026 KOSPI 5000]② Year of the Red Horse: Acceleration with the AI Engine

Selective Bull Market Expected as Stock Picking Intensifies
Semiconductor Sector Poised for Another Year of Earnings-Driven Growth
Automotive Sector Set for a Turnaround, Preparing to Reclaim Market Leadership

In 2026, the Year of the Red Horse, the upward momentum of the Korean stock market is expected to accelerate further. The Yeouido securities industry anticipates a "Jumagapyun" market, where powerful growth driven by artificial intelligence (AI) is combined with structural innovation across various industries. This is likened to spurring a running horse, meaning that additional momentum will be added to the ongoing upward trend.

The key word reflecting the financial investment industry’s expectations for the domestic stock market in the new year is "expansion." This refers to a phase in which the scale of investment, the scope of industrial application, and the visibility of corporate earnings all expand simultaneously. As AI technology spreads across industries-centered on semiconductors and extending to power infrastructure, nuclear power, automobiles, and the pharmaceutical and biotech sectors-the upward momentum is expected to broaden further.

Kim Jongmin, Senior Research Fellow at Samsung Securities, stated, "We expect the Korean stock market to run even stronger in the new year," adding, "The market will be driven by a function of liquidity and earnings." He further commented, "Amid a continued favorable global liquidity environment, the upward revision of corporate earnings, fueled by the AI growth story, will lead to an overall market upgrade."

Semiconductors & Power Infrastructure: Structural Earnings Momentum Driven by AI Expansion

The profit growth trend in the semiconductor sector is likely to continue next year. Kim Younggun, Researcher at Mirae Asset Securities, noted, "Despite a higher base, global semiconductor investment is estimated to increase to 600 billion dollars in 2026," highlighting the trend of increased capital expenditure among global big tech companies.

The memory market is also viewed as having favorable supply-demand conditions. Kim explained, "In all applications-including smartphones, servers, and AI accelerators-supply growth will remain limited compared to demand growth," and diagnosed that "on an annual basis, a phase of excess demand is likely to persist." He particularly emphasized, "Although AI demand is surging, the strategy is shifting toward product mix transformation rather than simply expanding supply," analyzing that "this shift in strategy will be a key factor in earnings improvement."

This trend is expected to extend to the semiconductor equipment sector as well. Considering natural attrition and utilization adjustments during the transition to advanced processes, total wafer capacity is likely to remain limited throughout the year. As a result, companies with technological barriers to entry are expected to see increased earnings visibility.

The securities industry also points to power infrastructure and nuclear power as additional beneficiaries of AI expansion. This is due to rapidly increasing power consumption driven by greater AI utilization and expanded data center investment. While global data center investment is projected to rise by 29.7% year-on-year, power infrastructure investment is expected to increase by only 2.5%. Consequently, concerns over a structural power supply shortage are emerging in the medium to long term. It is analyzed that expanded global investment in power infrastructure to address this shortage will likely benefit the nuclear power and power equipment sectors.

Automobile Stocks: Revaluation as Technology Platforms

After underperforming this year, the automobile sector is expected to reemerge as a promising industry in the new year. There is an outlook that it will be revalued as a technology platform industry, moving beyond the traditional manufacturing framework. Kim Guyun, Researcher at Daishin Securities, said, "We expect a revaluation of corporate value driven by increased US market share, improved earnings, expansion of the robotics value chain, and changes in autonomous driving strategies." He added, "The key themes at 'CES 2026,' the world's largest electronics and IT exhibition to be held in Las Vegas in January, will be physical AI, robotics, mobility, and digital health."

The pharmaceutical and biotech sectors are also among the industries expected to receive increased attention in the new year. The assessment is that the industry is moving beyond event-driven approaches and entering a phase where tangible results are being validated. Jung Yukyung, Researcher at Shin Young Securities, analyzed, "Year-end results at major conferences, strategic announcements by companies attending the JP Morgan Healthcare Conference (JPM) early in the year, and expectations for partnerships with global pharmaceutical companies will positively influence investor sentiment." With the restructuring of global supply chains, the selection process among companies with contract development and manufacturing (CDMO) and platform competitiveness is expected to intensify.

The securities industry believes that next year’s domestic stock market will not be driven by "themes" but by "proven performance." While the upward trend itself remains valid, it is pointed out that there will inevitably be differences in outcomes if strategies are not tailored to the market environment. Kim Jongmin, Senior Research Fellow at Samsung Securities, emphasized, "There is no such thing as perpetual growth, so risk management through scenario-based responses is essential," adding, "Companies that prove their value through actual profits and cash flow will take the lead in the market."

In 2026, the Year of the Red Horse, the Korean stock market is expected to see the semiconductor, automobile, pharmaceutical and biotech, and power infrastructure industries all riding the powerful engine of AI. It will be a year in which value is demonstrated not by expectations, but by concrete numbers and performance.