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 index by 25%, lowering it from 12,000 to 9,000. According to The Business Times - Companies & Markets and Investing.com, the downgrade follows a period where the benchmark plunged more than 35% from its June peak. MarketWatch reports that the reduction was driven by rising volatility and a decrease in the growth multiple investors are willing to pay for AI stocks.
The sell-off has been linked to investor concerns regarding the sustainability of massive infrastructure spending, rising financing costs, and uncertain returns within the artificial intelligence sector. The Kospi has become a bellwether for the AI trade due to its heavy exposure to chip-making giants Samsung Electronics and SK Hynix.
Despite the slashed target, the revised forecast still implies more than 60% upside from current levels. Investing.com reports that Goldman's analysts believe the market is pricing in an excessively pessimistic outlook for corporate fundamentals, suggesting that Korean equities have become significantly undervalued.
Brief written by urgent.news from MarketWatch, MarketWatch Top, The Business Times - Companies & Markets, Investing.com — 4 reports on this story. Machine-written — may contain errors; check the original before relying on it.
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