South Korean AI Stock Boom Fades as Trading Turnover Plummets

South Korea's once-vibrant artificial intelligence stock trade has cooled considerably, signaling a broader shift in investor appetite for the region's tech assets. Trading turnover has plunged 70 percent from its peak in late May, reflecting a sharp reversal in market enthusiasm that had previously buoyed equities linked to the AI boom.

Foreign investors have been particularly aggressive in unwinding their positions, marking the fastest retreat across Asian markets. The exodus underscores growing concerns about valuations and the sustainability of gains in AI-related stocks that had attracted significant capital inflows in recent months.

Domestic retail investors, who had actively participated in the rally, are also stepping back from the market. This dual withdrawal—from both foreign and local participants—has created a challenging environment for South Korean equities seeking fresh buying interest.

The decline highlights the challenges facing emerging Asian markets in maintaining momentum around thematic trades. As global economic uncertainties persist and interest rate expectations shift, investor focus appears to be rotating away from concentrated sector bets toward more defensive positions. The South Korean market's experience reflects broader trends affecting regional bourses as the initial excitement around artificial intelligence applications moderates.