Artificial intelligence has emerged as the dominant force in global financial markets, surpassing even oil prices in its influence over asset movements, according to a recent analysis by Goldman Sachs. The bank's analysts noted that exposure to semiconductor stocks now explains about 54% of the differences in performance across various asset classes over the past three weeks, while oil prices account for just 2%. This shift highlights how closely investor sentiment is now tied to technology stocks, particularly those involved in AI.
The latest market swings were triggered by Anthropic's filing for an initial public offering, which boosted enthusiasm for AI-related stocks. On Monday, the Nasdaq Composite and the S&P 500 each rose about 1%, while Nvidia jumped 2% and the Philadelphia Semiconductor Index climbed 3%. The rally extended to Asia on Tuesday, with South Korea's Kospi gaining as much as 5%, driven by strong performances from Samsung Electronics and SK Hynix.
South Korea has been particularly vulnerable to the AI trade, with memory-chip stocks making up about half of the Kospi. The benchmark index has fallen roughly 40% from its June peak, erasing part of a rally that had more than doubled its value this year. Goldman Sachs estimates that South Korean stocks outside the memory-chip sector are more than 30% undervalued relative to their profitability. Despite cutting its 12-month Kospi target from 12,000 to 9,000, the bank believes the market has been oversold and sees more than 60% upside from current levels.
Goldman Sachs remains modestly bullish on equities, citing strong earnings, lighter investor positioning, and lower valuations as factors that should support stocks through year-end. However, the bank's measure of investor willingness to take risks fell last week to its lowest level since April 2025, indicating heightened caution in the market.