Goldman Sachs Sticks to Bullish Korea Call Despite Wild Market Swings

Goldman Sachs has reiterated its bullish call on South Korea's equities despite weeks of wild market swings. The bank believes that the recent sell-off in AI-related stocks has gone too far and that investors are underestimating how long strong profit growth can continue for Korean memory-chip makers.

The analysts at Goldman pointed to accelerating demand for AI computing and severe memory shortages, potentially lasting through 2030, as a key driver of chip prices and profits. They also noted that concerns over Big Tech's capital spending and its ability to finance investment are valid, but do not overturn their view that the current AI-hardware cycle will be unusually large and long.

Goldman's analysts see opportunities beyond memory chips, including companies in power infrastructure, industrial automation, defense, shipbuilding, robotics, and energy. The bank's target for the Kospi index is 12,000, implying about 80% upside from current levels.