Goldman Sachs Retains 12,000 Kospi Target as Memory Boom Defies Market Volatility

Goldman Sachs Group Inc. chief Asia Pacific equity strategist Timothy Moe is standing by his bullish target for South Korean equities, arguing that investors are severely underestimating the longevity of artificial intelligence-driven demand for memory chipmakers. Moe maintains his 12,000 benchmark target for the Kospi index, representing a potential upside of nearly 80% from current trading levels. The projection, initially established three months ago as one of the most aggressive forecasts on the financial street, comes despite a significant 27% correction in the Kospi from its June record high amid mounting anxiety over corporate AI expenditure sustainability.

The market pullback has occurred even as major domestic semiconductor producers like Samsung Electronics Co. and SK Hynix Inc. report stellar financial earnings, highlighting a disconnect between corporate fundamentals and equity valuations. Moe contends that the current market pessimism ignores the sheer scale of global data center construction, which has created acute supply shortages across memory and storage chip sectors. These structural supply tightness dynamics are anticipated by Goldman Sachs to accelerate further through 2027, propelled by aggressive infrastructure deployment among major technology corporations.

The fundamental thesis underpinning the 80% upside projection relies heavily on accelerating capital expenditure cycles among United States hyperscalers. Goldman Sachs estimates that US Big Tech spending will surge past $1.2 trillion next year, marking a dramatic upward revision from previous baseline forecasts of $800 billion. According to Moe, these technology giants are locked in a structural race where they are compelled to continue aggressive spending irrespective of immediate returns.

The hyperscalers “have to continue to spend even if they don’t make money,” Moe said in an interview. “It’s great for memory because it’s going to drive compute demand, which is very memory intensive.” This relentless appetite for computational power guarantees robust, sustained order pipelines for advanced memory manufacturers, insulating them from broader macroeconomic headwinds.

Despite severe stock price volatility and a 27% retreat from summer peaks, Moe emphasizes that corporate earnings growth remains exceptionally strong. The Goldman strategist projects earnings growth of roughly 360% for Kospi member companies this year, before moderating to approximately 35% by 2027. He notes that the eventual deceleration of profit growth is already fully understood and priced in by sophisticated market participants.

“We’re still holding to it — it’s driven by what we think will be earnings delivery,” Moe stated, adding that “the market is underpricing the duration of this earning cycle.” Valuation multiples further support the bullish thesis, with the Kospi currently trading at 5.3 times forward earnings estimates—roughly half of its historical seven-year average. Moe’s 12,000 target is constructed on a modest multiple of 7.5 times forward earnings, which he argues is entirely defensible if corporate profit projections materialize.

While maintaining an overwhelmingly positive outlook, Goldman Sachs has factored several distinct operational risks into its long-term equity strategy. The strategist explicitly acknowledges rising competitive pressures from emerging Chinese memory manufacturers such as CXMT Corp., alongside potential domestic political pushback against the massive, power-intensive United States data center buildout.

Nevertheless, the bank's analysis concludes that technological advantages and structural supply constraints heavily favor advanced memory chipmakers for at least the next couple of years. If South Korean corporations successfully achieve the forecasted earnings trajectory, Moe maintains that his ambitious 12,000 Kospi estimate “isn’t as crazy as it might appear” to skeptical investors.

The persistence of the disconnect between stellar chipmaker earnings and depressed equity prices remains a central puzzle for institutional investors navigating the Korean exchange. Although recent earnings reports from local semiconductor titans have met or exceeded expectations, broader market participation has lagged due to surging volatility and fluctuating risk appetite.

As capital expenditure figures for US hyperscalers approach the projected $1.2 trillion threshold heading into 2027, the coming quarters will test whether earnings delivery can successfully bridge the gap between current depressed valuations and Goldman’s ambitious target.