South Korea's Kospi has more than tripled in less than 18 months. According to a Financial Times report cited by Economic Times, it has outpaced the Nasdaq's bull run in the 1990s—the one that ended in the Dotcom crash.

The Latest Data on Market Concentration

Analysts are now making direct comparisons to the late 90s, and they're raising concerns. Billy Leung, global investment strategist at Global X ETFs, told CNBC: "Top 10 reshuffles happen roughly every cycle, but usually on the back of a domestic boom, a big IPO, or many years of outperformance. What is unusual here is the speed and how narrow the drivers are."

Narrow is accurate. TSMC alone accounts for more than 40% of Taiwan's entire market capitalization. Samsung Electronics and SK Hynix together make up a record 42.2% of South Korea's Kospi. Two stocks. Nearly half an index.

This is concentration risk, not diversification.

European AI-Linked Stocks Post Triple-Digit Gains

European AI-linked stocks are posting returns that dwarf traditional equity performance. Germany's Aixtron, a chip equipment maker, is up 189% year-to-date and over 300% in the past 12 months, according to CNBC. Italy's Technoprobe is up 129%. STMicroelectronics is up 133%. Nokia has jumped 108% in 2026 after pivoting to AI infrastructure.

Citi hiked Aixtron's price target by more than 66% in an April note, citing stronger demand and margins. AI is now the primary revenue driver of Aixtron's 2026 guidance, per Citi's analysis.

Fabio Bassi, head of cross-asset strategy at J.P. Morgan, explained the dynamic to CNBC: "In Europe, scarcity amplifies the trend. There are few large, liquid AI pure-plays, so flows concentrate in a small group of perceived AI proxies, combining real AI-linked demand with crowded positioning."

Crowded positioning—Wall Street-speak for everyone piling into the same trade.

The Real Story

Financial media is framing this as a triumphant reshuffling. Taiwan is now the sixth-largest equity market in the world, overtaking Canada. South Korea is eighth, leapfrogging the U.K.—per HSBC data. These are real facts.

But the entire move is driven by a handful of companies in a single sector during a single macro theme. Goldman Sachs' chief Asia-Pacific equity strategist Tim Moe told CNBC that the transition to agentic AI has triggered "an explosion of so-called token demand" creating supply shortages and "extraordinary pricing power for chipmakers"—but he also noted this could make the gains more vulnerable.

June Chua, head of Asia equities at Manulife Investment Management, said: "Both indices have effectively become AI and semiconductor proxies."

This is a leveraged bet on one technology cycle paying off—so far.

The Dotcom Comparison

Investors are openly drawing Dotcom bubble comparisons. The Financial Times data shows Kospi tripling faster than late-90s Nasdaq.

The 1999 Nasdaq tripled too. Then it fell 78% from peak to trough.

Brian Colello, senior equity analyst at Morningstar, offered context to CNBC: "The AI buildout is consuming semiconductors of all types, which bodes well for STMicroelectronics and its peers." Real demand. Real revenue. But real demand can still produce overpriced stocks.

The Practical Implications

If you have a 401(k) with international exposure, you almost certainly have indirect bets on TSMC, Samsung, and SK Hynix right now. Most global index funds do.

The AI infrastructure buildout is real. The capex spend from Big Tech is real. But when a national stock market is 42% one industry and two companies, you own a semiconductor trade with a national flag on it, not a diversified position.

The gains are real. The concentration risk is real. Both are true simultaneously.