JPMorgan Raises Kospi Target Again, Sees Upside to 10,000

JPMorgan has raised its outlook for South Korean stocks again, putting its Kospi target as high as 10,000.

In a recent report cited by Bloomberg on May 11, the bank raised its base-case target for the Kospi to 9,000 and its bullish-case target to 10,000. That is a sharp increase from the 7,000 and 8,500 targets it presented in late April and implies upside of more than 30% from the current level.

The upward revision reflects an improving semiconductor cycle, corporate governance reform and growth expectations across industries. JPMorgan identified a recovery in memory chips, driven by expanding artificial intelligence demand, as the key catalyst.

The Kospi has continued its strong rally. The index briefly rose above 7,800 in morning trading on May 11, setting a fresh record high. Its gain this year has exceeded 80%, the biggest advance among major global indexes. Goldman Sachs had earlier raised its Kospi target to 9,000 as well.

JPMorgan wrote that some signs of short-term overheating have emerged, but fundamentals remain solid. It said there is still room for further gains as the memory-chip cycle recovers and structural reforms and industry growth themes continue.

At the same time, concern about an overheated market is building. Technical indicators show the Kospi has remained in overbought territory throughout May, while the number of advancing stocks has been limited.

Retail buying has driven the rally, while foreign investors have been taking profits and remain net sellers.

JPMorgan expects the memory-chip industry to enter a full upcycle over the next two years. Memory-related stocks account for about half of the Kospi's market capitalization and have driven most of this year's gains, the report said.