Goldman Sachs Keeps 12,000 Kospi Target, Sees About 80% Upside

Goldman Sachs kept its 12,000 target for South Korea’s Kospi, saying strength in the country’s memory-chip industry driven by expanding artificial-intelligence investment will last longer than expected.

Bloomberg reported on September 6 that Timothy Moe, Goldman Sachs’s chief Asia-Pacific equity strategist, said in an interview that the bank was maintaining its 12,000 target for the Kospi. That is roughly 80% above the index’s current level. When Goldman first set out the forecast three months ago, it was among the most bullish targets in the market.

“We are still maintaining that target, and the earnings delivery we expect from companies supports it,” Moe said. The market is underestimating how long this earnings cycle can last, he added.

The Kospi has fallen 27% from the record high it reached in June. Concerns over whether Big Tech can sustain its AI spending, along with increased volatility in South Korea’s stock market, have weighed on investor sentiment. Samsung Electronics Co. and SK Hynix Inc. both reported strong earnings, but the results did little to lift their shares.

Goldman said a global race to build data centers is creating shortages of memory and storage semiconductors, driving prices higher, and that the trend will be even stronger in 2027. Moe estimated that spending by U.S. Big Tech next year will total at least $1.2 trillion, far above the previous forecast of $800 billion. “Hyperscalers have to keep investing even if they are not making money,” he said. That is positive for memory makers because it boosts computing demand and significantly increases memory use.

Goldman expects earnings at Kospi-listed companies to jump about 360% this year and grow about 35% in 2027. It identified the rise of rivals including China’s ChangXin Memory Technologies, or CXMT, and political backlash against data-center construction in the U.S. as risks. Even so, the bank expects favorable fundamentals for advanced memory-chip makers to continue over the next several years.

Moe said the 12,000 Kospi target is based on applying a 12-month forward price-to-earnings ratio of 7.5 times. The Kospi is currently trading at a forward P/E of 5.3 times, about half its average over the past seven years. If South Korean companies meet Goldman’s earnings forecasts, a 12,000 Kospi “is not as absurd as it looks,” he said.