Goldman Sachs Stands Firm on 12,000 KOSPI Target Amid AI-Fueled Chip Boom
Goldman Sachs has reaffirmed its bullish stance on the South Korean stock market, maintaining its KOSPI target of 12,000. The investment bank's chief Asia-Pacific equity strategist, Timothy Moe, believes that the memory semiconductor upcycle driven by artificial intelligence investment will persist longer than expected.
The KOSPI has dropped 27% since hitting an all-time high in June, weighed down by concerns over the sustainability of Big Tech AI spending and market volatility. However, Moe expects this trend to strengthen further in 2027 due to the global race to build data centers, which is driving up chip prices.
According to Goldman Sachs, U.S. Big Tech spending next year will reach at least $1.2 trillion, far exceeding the previous forecast of $800 billion. This, in turn, will drive computing demand and increase memory usage, benefiting the memory industry.
The 12,000 KOSPI target is based on a 12-month forward price-to-earnings ratio of 7.5x, which is significantly lower than its seven-year average of 10.6x. Goldman Sachs expects earnings for KOSPI-listed companies to surge approximately 360% this year before moderating to around 35% in 2027.