Goldman Sachs Sees 90% Upside in Korean Stocks

Goldman Sachs Chief Asia-Pacific Equity Strategist Tim Moe has raised the firm's Kospi target to 12,000, representing a roughly 90% upside for investors. The call comes as the Korean market absorbs a violent unwind of leveraged retail products and near-term volatility remains high.

Moe cited valuation and earnings growth tied to the AI capex cycle as reasons for his optimistic outlook. He noted that the Kospi is trading at five times current consensus 12-month earnings, which are growing 32% this year and projected to reach 35% next year.

The Korean market's composition explains why Moe emphasizes semiconductors, which make up over 50% of the Kospi. He highlighted SK Hynix and Samsung Electronics as key players in this sector, with the two companies together accounting for 54.74% of the iShares MSCI South Korea ETF (EWY).

Moe's call is conditional on earnings growth delivering at current valuations. The near-term signal will be whether Korean leveraged-ETF assets under management normalize off their recent low and volatility resets.