Goldman Sachs Cuts South Korea Kospi Target by 25% Amid AI Stock Slump
Goldman Sachs slashed South Korea's Kospi index target by 25% to 9,000 points following a 35% drop from its peak. Analysts still see 60% upside potential amid the global AI stock rout.
Goldman Sachs cut its 12-month target for South Korea's benchmark Kospi index by 25% on Sunday, lowering it from 12,000 points to 9,000 points. The adjustment comes as the market has plunged more than 35% from its June peak amid a sharp global downturn in artificial intelligence stocks.
Despite the steep reduction, the Wall Street investment bank emphasized that the new target still implies an upside potential of more than 60% compared to current trading levels. Goldman Sachs analysts believe the recent sell-off has created an attractive investment opportunity, arguing that current stock prices reflect an overly pessimistic economic scenario.
Strategists at the bank, led by Timothy Moe, explained that the revised forecast is based on more conservative valuation assumptions. However, they maintain that the risk-reward ratio in the South Korean equity market remains compelling for long-term investors.
South Korea has historically been a major beneficiary of the global AI boom, driven by dominant local semiconductor giants such as Samsung Electronics and SK Hynix. These companies hold significant weight in the Kospi index, capitalizing heavily on soaring demand for advanced memory chips used in data centers and artificial intelligence systems.
Nevertheless, market sentiment has soured in recent months over mounting concerns regarding the sheer scale of capital expenditure in AI infrastructure. Investors increasingly question whether tech firms can generate adequate returns on these massive investments, particularly against the backdrop of rising financing costs. Consequently, the sell-off in chipmakers has rippled across other sectors of the South Korean exchange.
