Key Takeaways:
- Goldman Sachs lifts KOSPI 12-month target to 12,000, implying 36% upside
- Asia-Pacific EPS expected to grow 60% in 2026, led by tech sector
- Rally concentrated in Samsung and SK Hynix as breadth turns negative
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Goldman Sachs lifts KOSPI target to 12,000, sees 36% upside
Goldman Sachs raised its 12-month KOSPI target to 12,000, implying a 36% gain from the index's 8,801 close on Tuesday.
"Earnings are driving Asian equity returns," strategists led by Timothy Moe at Goldman Sachs said, citing expectations for 60% EPS growth in Asia-Pacific this year with the tech sector set to deliver the strongest performance. The firm maintained its Overweight rating on South Korea, reflecting higher earnings, an underpriced memory cycle duration and factors that could drive a re-rating.
The KOSPI has already doubled in 2026, making it one of the world's best-performing major benchmarks. The rally has been concentrated in semiconductor heavyweights Samsung Electronics and SK Hynix, with the chip cycle remaining the dominant driver of equity performance, according to Peter Kim, global strategist at KB Financial Group. In Hong Kong, leveraged ETFs tracking the two chipmakers surged, with XL2CSOPHYNIX rising 3.45% to HKD143.85 and XL2CSOPSMSN gaining 5.15% to HKD236.9 on turnover of HKD741 million.
The divergence between the booming stock market and softer domestic conditions has complicated the outlook for policymakers. Korea's economy faces sluggish wage growth, weak job creation and pressure from higher energy prices, even as equities and property prices climb. Kim warned that China is rapidly gaining market share from Korean exporters, adding to the fragility.
The bullish call also faces near-term technical risks. BTIG's Jonathan Krinsky noted the KOSPI surged 12.15% over the past six sessions with negative breadth each day, as the largest names now account for roughly 50% of the index. The Korea stock market was closed for a holiday on Wednesday.
Goldman also raised price targets on Samsung Electronics and SK Hynix and upgraded Kioxia Holdings to Buy, reflecting confidence in the memory cycle's duration. The bank sees AI-driven demand for high-bandwidth memory as a multi-year growth driver, with Asia-Pacific tech earnings leading the region's 60% EPS expansion in 2026. The semiconductor sector's dominance means the KOSPI's fate is increasingly tied to global AI chip demand rather than domestic economic conditions. Foreign investors have poured capital into Korean equities this year, betting the chip cycle has further to run despite the narrowing of the rally.
The target raise shows Goldman expects the AI-driven semiconductor cycle to sustain Korea's equity rally. Investors will watch for any signs of earnings momentum slowing in the second half of 2026 as the KOSPI tests the 12,000 level.
This article is for informational purposes only and does not constitute investment advice.
[1] G Sachs Raises S Korea KOSPI 12-Mth TP to 12,000, Implies 36% Upside[2] Korea’s stock market has doubled in 2026, and Goldman still sees another 35% upside[3] Not enough even after doubling? Goldman Sachs raises its target for South Korean stocks, aiming for 12,000 points! - Moomoo[4] G Sachs Raises S Korea KOSPI 12-Mth TP to 12,000, Implies 36% Upside - AASTOCKS.com[5] Korea’s stock market has doubled in 2026, and Goldman still sees another 35% upside - CNBC
