Can it rise another 35% after doubling? Goldman Sachs raises South Korea's KOSPI index target to 12,000 points, betting on the continued storage cycle of AI.

The South Korean stock market has already doubled this year, but according to Goldman Sachs strategist, as South Korea's artificial intelligence chip giants continue to drive profit growth, this upward trend may have further room to rise. Goldman Sachs on Wednesday raised its 12-month target price for the Korean Composite Stock Price Index (Kospi) from 9000 points to 12000 points, 35% higher than the current level. Goldman Sachs strategist Timothy Moe and his team said, "Corporate earnings are driving the rise in Asian stock markets." Given the "higher profit expectations, underestimated duration of the storage cycle, and catalysts for revaluation," they still have a positive view on the South Korean stock market. The South Korean Kospi index has risen by about 100% so far this year, becoming one of the best-performing major stock indexes globally. However, this round of upward trend is increasingly concentrated in a few heavyweight tech stocks, especially in storage chip manufacturer SK Hynix and electronic giant Samsung Electronics. Global financial services company BTIG pointed out that this rapid rise is also accompanied by risks. "Over the past six trading days, the KOSPI index has risen by 12.15%. However, the breadth of this index has been negative every day, and the declines have been significant," said Jonathan Krinsky, chief market technician at BTIG. "This is what happens when a few of the largest companies by market cap account for nearly 50% of the index." Peter Kim, global strategist at KB Financial Group, stated that the performance of the two leading stocks in the South Korean stock market significantly outperforms the broader market, and the semiconductor cycle remains the core driving force of the market. He said in a research report, "The stock market hype is overshadowing the various hidden risks in the South Korean real economy and industry." Kim warned that Chinese manufacturers are rapidly seizing market share from South Korean exporters, and the overall domestic economy in South Korea remains weak. The contrast between the prosperity of the stock market and the weakness of the economy has made the outlook for policymakers more complicated. Despite continuous rises in the stock market and real estate prices, the South Korean economy still faces challenges such as weak wage growth, slow job growth, and rising energy prices. Data released on Tuesday showed that South Korea's consumer price index in May rose 3.1% year-on-year, the largest increase since March 2024, with economists expecting a median of 2.9%. The hot inflation data also supports a hawkish stance from the Bank of Korea. Currently, the market expects the Bank of Korea to start raising interest rates as early as July 2026. Nevertheless, global investors seem willing to temporarily overlook these risks, as AI-driven profit growth continues to dominate the region's stock markets. Goldman Sachs raised its 12-month target for the MSCI Asia Pacific Index from 990 points to 1080 points. Goldman Sachs predicts that by 2026, earnings per share in the Asia Pacific region will increase by 60%, with technology stocks continuing to be the strongest performing sector.