Goldman Strategist Holds 12,000 KOSPI Target While Memory Chip Earnings Narrow 74% Gap

Goldman Sachs’ chief Asia Pacific equity strategist is maintaining a 12,000 target for South Korea’s KOSPI index despite a 24% decline from its June peak, betting that semiconductor earnings growth will drive a 74% rally from current levels. The conviction rests on expectations for a multi-year chip upcycle powered by artificial intelligence infrastructure spending, even as concentrated exposure to SK Hynix and Samsung Electronics creates both opportunity and risk.

• KOSPI trades near 6,899, up 60% in 2026 but down 24% from June record close
• SK Hynix gained 157% year to date; Samsung Electronics up 106% year to date
• Goldman expects KOSPI earnings growth near 360% in 2026, cooling to 35% in 2027

• 74% Gap between current KOSPI level and Goldman Sachs’ 12,000 target
• 7.5x Forward earnings multiple assumed in Goldman’s 12,000 price target
• 5.3x Current forward earnings multiple, versus seven-year average of 7.0x
• $1.2T Projected US Big Tech spending next year versus prior $800 billion estimate

Timothy Moe, Goldman Sachs’ chief Asia Pacific equity strategist, set his 12,000 target for South Korea’s benchmark index three months ago and has not wavered, even as the KOSPI lost roughly a quarter of its value from its June record. The index currently trades near 6,899 after climbing 60% through 2026, propelled largely by semiconductor stocks SK Hynix and Samsung Electronics, which have gained 157% and 106% respectively on expectations for a multi-year artificial intelligence-driven chip upcycle. Moe’s thesis hinges on earnings delivery that the market has yet to price in.

South korea’s Semiconductor dominance and AI infrastructure boom

South Korea has emerged as a critical player in the global semiconductor supply chain, with SK Hynix and Samsung Electronics controlling substantial portions of the world’s memory chip production. These two companies supply essential components for artificial intelligence data centers and infrastructure buildouts across the globe, making them direct beneficiaries of the massive capital investments technology giants are deploying in AI systems.

The importance of South Korean chipmakers extends beyond their market share. As competition intensifies among major technology firms for AI dominance, securing reliable supplies of advanced memory chips has become strategically critical, supporting pricing power and volume growth for local manufacturers.

Goldman expects 360% earnings growth this year amid AI Demand surge

Moe projects KOSPI constituents will deliver earnings growth near 360% in 2026, a dramatic reversal from weakness in 2023 and early 2024, before moderating to roughly 35% growth in 2027. These forecasts reflect expectations for sustained semiconductor demand driven by global artificial intelligence infrastructure buildouts, particularly as major US technology firms compete to secure computing capacity and capital for next-generation systems.

The magnitude of this earnings acceleration would represent a historic swing for the index, driven by the recovery of semiconductor margins and utilization rates from depressed pandemic-era levels. High-bandwidth memory chips used in AI accelerators have commanded premium pricing as demand has outpaced supply, supporting gross margin expansion across the industry.

We’re still holding to it — it’s driven by what we think will be earnings delivery. The market is underpricing the duration of this earning cycle.

Timothy Moe, Chief Asia Pacific Equity Strategist, Goldman Sachs

Moe estimates US Big Tech spending will reach $1.2 trillion next year, substantially above earlier projections near $800 billion, creating a significant tailwind for South Korean chipmakers that supply critical components for AI infrastructure. The magnitude of the earnings swing underscores the opportunity in cyclical sectors when caught early in a demand recovery.

Valuation discount provides room for multiple expansion to 7.5x earnings

The KOSPI currently trades at 5.3 times forward earnings, representing roughly half its seven-year average, reflecting market skepticism about the durability of the chip cycle and broader caution toward cyclical sectors. Moe’s 12,000 target assumes a forward earnings multiple of 7.5 times, implying meaningful multiple expansion alongside the projected earnings growth. This valuation gap suggests the market remains underpricing both earnings delivery and the sustainability of semiconductor demand growth.

The discount reflects general wariness after past semiconductor downturns, particularly the 2022-2023 memory chip crash that devastated profitability across the industry. Investors remain cautious about betting heavily on cycle recoveries, having suffered substantial losses in previous false starts.

Korean equities historically trade at varying multiples depending on capital flow patterns and investor risk appetite, making the current valuation environment potentially attractive for investors with conviction in the earnings thesis. Geopolitical tensions and concerns about North Korea occasionally create valuation discounts that dissipate when global risk sentiment improves.

Leveraged ETF volatility tests retail investor conviction ahead of earnings tests

The path to 12,000 has proven turbulent, with July’s leveraged ETF unwind hitting Korean retail investors hard and August seeing leveraged funds tracking SK Hynix and Samsung post their first monthly outflow, shedding close to $1 billion.

Market volatility has grown so pronounced that Bitcoin spent stretches of 2026 trading calmer than the KOSPI, creating a challenging environment for buy-and-hold investors while rewarding nimble traders. The concentration of gains in just two heavyweights underscores both the opportunity and the concentration risk in South Korea’s market, where semiconductor manufacturers dominate index weighting and economic significance.

Retail investor participation in Korean markets has grown substantially, with leveraged ETFs becoming increasingly popular as vehicles to amplify exposure to semiconductor stocks. However, leveraged products amplify losses as well as gains, and sharp market reversals have forced cascading liquidations that exacerbate volatility and create flash-crash dynamics.

Earnings validation critical to justifying bullish thesis

Critical tests lie ahead: Samsung and SK Hynix have posted strong quarterly results with little market reward, making upcoming earnings crucial for validating the bullish thesis and determining whether recent rallies have already priced in the good news.

The disconnect between strong operational performance and muted stock price reactions suggests investors remain unconvinced about the cycle’s longevity. Companies that have guided to record revenues and margins have seen shares struggle, indicating the bar for validation has risen substantially.

Moe is not alone in his optimism, though his view is more aggressive than peers. Morgan Stanley lifted Korea to overweight in early August with a 9,000 KOSPI target, implying substantial upside but reflecting broader institutional recognition of opportunity in the market. The near-term catalyst remains clear: whether chipmakers’ earnings growth can overcome skepticism about cycle durability and close the 74-percentage-point gap to Goldman’s target.

BlockWest is a news publication. Nothing here is investment advice. Read our disclaimer and editorial policy.