Goldman Sachs Stands Firm on South Korea Equity Target Amid Memory Chip Boom

Goldman Sachs strategist Timothy Moe remains bullish on the South Korean stock market, predicting that it will reach 12,000 points in the near future. This target implies nearly 80% upside from current levels.

Moe argues that investors have underestimated the duration of the positive impact of artificial intelligence (AI) on the country's memory chip manufacturers. He believes that earnings growth for KOSPI constituents will be around 360% this year, easing to about 35% by 2027.

The market has already retraced 27% from its June record high, driven by concerns over the sustainability of tech giants' AI investment boom and Korean stock-market volatility. However, Moe expects a severe shortage of memory and storage chips to drive up their prices, benefiting the memory industry.

Despite potential risks such as competitive pressure from Chinese rivals and possible political headwinds to data-center construction in the United States, Moe remains confident that fundamentals will favor leading advanced-storage-chip manufacturers over the next two to three years.