Goldman Sachs Sees 90% Upside for Korean Stocks on AI-Driven Earnings

Goldman Sachs is optimistic about Korean stocks, predicting a 90% upside. The firm's Chief Asia-Pacific Equity Strategist Tim Moe raised the Kospi target to 12,000, citing valuation and an earnings ramp tied to the AI capex cycle.

The market is currently trading at 5.1 times current consensus 12-month earnings, with those earnings growing 32% this year and 35% next year, according to Goldman's model. Moe noted that the 5x forward multiple sits roughly two standard deviations below historical norms.

The Korean market's composition explains why Moe emphasizes semiconductors, which make up over 50% of the Kospi. Semiconductors are tied directly to the AI infrastructure buildout that Goldman's own 2026 outlook has flagged as the dominant global earnings engine.

Two US-listed ETFs offer exposure to Korean stocks: iShares MSCI South Korea ETF (EWY) and Franklin FTSE South Korea ETF (FLKR). EWY is more concentrated in semiconductors, holding SK Hynix at 30.85% of net assets and Samsung Electronics at a combined 23.94%. FLKR has less semiconductor concentration but still significant weights in semiconductors.