Goldman Sachs strategists, including Timothy Moe, cut their 12-month target for South Korea’s Kospi from 12,000 to 9,000, a 25% reduction, Bloomberg reported Oct. 25. They had raised the target repeatedly earlier in 2026. The analysts cited more conservative valuation assumptions after the index fell more than 35% from its June peak.
The cut did not erase their optimism. Bloomberg reported that the strategists considered Korean equities highly undervalued. Their revised target implied more than 60% upside from market levels at the time of the report. That is the upside implied by a forecast, not a guaranteed return or a prediction that the index would fall another 25%.
The Bloomberg-origin report carried by The Business Times describes Samsung Electronics and SK Hynix as reasons the Kospi has become a bellwether for the AI trade. It reports investor concerns about the sustainability of AI infrastructure spending, rising financing costs and insufficient returns, with selling pressure spreading into the broader Korean market.
“The market is pricing an overly negative fundamental outlook,” the Goldman strategists wrote in an Oct. 25 note, according to the report. They estimated that semiconductor valuations implied a 65% decline in the sector’s 2027 earnings, a scenario they considered excessively pessimistic. That was their reading of what prices implied, not their earnings forecast.
