Goldman cuts Kospi 12-month target by 25% as AI trade unravels
The revised forecast of 9,000 still implies a more than 60% upside from current levels
Goldman Sachs strategists have reduced their target for South Korea's Kospi index by 25 per cent, citing concerns over the artificial intelligence trade. The analysts lowered their 12-month target from 12,000 to 9,000, as the benchmark has fallen more than 35 per cent from its June peak. Despite the sell-off, the strategists believe the market still presents a more than 60 per cent upside from current levels.
The sell-off has left the equities highly undervalued, with the strategists estimating a 65 per cent decline in semiconductor earnings for 2027, a figure they consider excessively pessimistic. The Kospi is heavily influenced by chip-making giants such as Samsung Electronics and SK Hynix, which have contributed to investor concerns about the sustainability of infrastructure spending and rising financing costs in the sector.
The strategists noted that the market is pricing an overly negative fundamental outlook and that the current valuation remains attractive given the potential risk-reward scenario.
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