Standing proudly in New York City’s financial district near the New York Stock Exchange, the iconic Wall Street bull is a familiar sight. This photograph was captured on November 18, 2025, by Spencer Platt of Getty Images.
In a significant shake-up of the global stock market landscape, artificial intelligence is playing a pivotal role in reshaping the hierarchy of equity markets. This transformation has seen Taiwan and South Korea outpace several well-established Western stock exchanges.
According to recent data from HSBC, Taiwan has surpassed Canada to claim its position as the world’s sixth-largest stock market. Meanwhile, South Korea has moved ahead of the United Kingdom, securing the eighth spot. This shift highlights the growing power of economies that are central to the semiconductor supply chain, driven by the AI boom.
Back in 2004, Taiwan’s stock market ranked as the 12th largest globally, valued at approximately $500 billion, with South Korea following closely at 13th with a market value of $400 billion. Fast forward to today, and these markets have soared to valuations of $4.7 trillion and $4.4 trillion, respectively. They now trail only behind the top five markets: the United States, China, Japan, Hong Kong, and India.
Such realignments are not without precedent. China made its way into the upper echelons of global markets in the late 2000s, and India briefly surpassed Hong Kong in late 2023 before slipping back to a lower rank.
A reshuffling like this isn’t unprecedented. China entered the top tier of global markets in the late 2000s, while India surpassed Hong Kong in late 2023 before falling back below it.
That said, the ascent of South Korea and Taiwan is striking.
“What is unusual here is the speed and how narrow the drivers are,” said Billy Leung, global investment strategist at Global X ETFs. “Top 10 reshuffles happen roughly every cycle, but usually on the back of a domestic boom, a big IPO, or many years of outperformance.”
The rally has been driven by an extraordinary concentration of capital into a handful of AI-linked firms. TSMC alone now accounts for more than 40% of Taiwan’s market capitalization, while Samsung Electronics and SK Hynix together make up a record 42.2% of South Korea’s Kospi index.
Top 10 reshuffles happen roughly every cycle but usually on the back of a domestic boom, a big IPO, or many years of outperformance.
“Both indices have effectively become AI and semiconductor proxies,” said June Chua, head of Asia equities at Manulife Investment Management.
Goldman Sachs’ chief regional equity strategist for Asia-Pacific, Tim Moe, agreed.
“It’s the AI hardware theme that’s clearly what is propelling things.” The transition toward agentic AI has triggered “an explosion of so-called token demand,” creating a supply shortage that is driving extraordinary pricing power for chipmakers, he said.
That also could make the gains more vulnerable to reversal. South Korean equities dropped late last week after foreign investors dumped roughly $13 billion worth of local stocks, triggering sharp swings in the benchmark index. This also comes as shares of Samsung Electronics, a heavyweight in the Kospi, have whipsawed as investors monitored labor negotiations and potential for a strike.
The AI-fueled rally has also come with sharp bouts of volatility, exposing investors to sudden swings in a handful of heavyweight stocks. MSCI’s global head of index regional research solutions Raman Aylur Subramanian said the AI-driven repricing collided with geopolitical shocks and shifting interest-rate expectations this year, making the first quarter of 2026 “particularly disruptive for global markets and multi-asset portfolios.”
“We’re now reaching levels where many Asian portfolios are starting to face concentration risk, meaning too much exposure to a small number of stocks in the region,” said HSBC’s Asia-Pacific head of equity strategy, Herald van der Linde. “That may limit further upside.”
That concentration risk has also prompted comparisons with markets such as Saudi Arabia and Denmark, where benchmark indexes are heavily dominated by Aramco and Novo Nordisk respectively.
Danish stocks came under pressure as worries grew over slowing demand for obesity treatments produced by Novo Nordisk, while Saudi Arabia’s market, which is largely driven by Saudi Aramco, weakened alongside falling crude prices. Saudi equities have since recovered part of those losses as oil prices rebounded.
