The Kospi index is the leading indicator for the global AI trade — and Goldman just slashed its forecast by 25%
A reduction in the growth multiple that investors are prepared to pay for AI stocks and a rise in volatility has forced Goldman strategist Tim Moe to take an axe to his Korean market target.
Goldman Sachs strategists, led by Timothy Moe, have reduced their 12-month target for South Korea’s Kospi by 25%, lowering the forecast from 12,000 to 9,000. The revision follows a plunge in the benchmark of more than 35% from its June peak. According to The Business Times - Companies & Markets and Investing.com, the decision stems from more conservative valuation assumptions and intensifying concerns regarding the artificial intelligence trade.
The Kospi has become a bellwether for the AI trade due to its exposure to chip-making giants Samsung Electronics and SK Hynix, which benefit from memory chip demand for AI infrastructure. Both Investing.com and The Business Times - Companies & Markets note that selling pressure has been driven by concerns regarding the sustainability of massive infrastructure spending, rising financing costs, and uncertain returns.
Despite the reduction in the target, the revised 9,000 forecast still implies more than a 60% upside from current levels. The Business Times - Companies & Markets and Investing.com report that strategists believe the sell-off has left Korean equities highly undervalued, with the market pricing in an overly negative outlook for corporate fundamentals.
Brief written by urgent.news from MarketWatch Top, The Business Times - Companies & Markets, Investing.com — 3 reports on this story. Machine-written — may contain errors; check the original before relying on it.
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