Goldman Sachs Raises KOSPI Target to 12,000 Amid AI Demand Surge

Goldman Sachs chief Asia Pacific equity strategist Timothy Moe has reaffirmed a KOSPI target of 12,000, set for early September 2026. This new target suggests an approximate 80% upside from current index levels, following a 27% correction from the KOSPI's June peak.

The bank has progressively raised its KOSPI target throughout the year, starting at 8,000, moving to 9,000 in June, and now to 12,000. Goldman anticipates that KOSPI constituents will experience earnings growth between 300% and 360% by 2026, largely driven by the performance of major players like Samsung Electronics and SK Hynix, which together represent about half of the KOSPI's market capitalization.

Moe argues that the market is underestimating the longevity of elevated earnings from these firms, linking it to an ongoing AI-driven supercycle that is still in its early phases. Goldman projects that U.S. big tech capital expenditures on AI-related initiatives will surpass $1.2 trillion by 2027, a significant increase from earlier estimates of around $800 billion.

Samsung and SK Hynix are crucial in high-bandwidth memory production, essential for AI accelerators. Currently, the KOSPI trades at about 5.3 times forward earnings, compared to a historical average of 10 to 11 times over the past seven years.

However, Goldman also highlights the risk posed by increasing competition from Chinese manufacturers in the memory sector. While these companies have not yet matched the advanced capabilities of their South Korean counterparts, any rapid technological advancements could impact profit margins more swiftly than Goldman’s current projections suggest.