Goldman Sees Kospi at 12,000 KRW, Flags Chip Risks

Goldman Sachs projects South Korea’s Kospi index could climb roughly 40% to 12,000 KRW on continued demand tied to artificial intelligence and planned spending by major U.S. cloud operators.

Goldman analysts wrote that earnings growth in North Asia is strong and that AI-related spending by large American hyperscalers should support the region. The firm said foreign investors and a weaker Korean won could add momentum to the rally.

The Kospi reached about 8,900 KRW on Wednesday, a record level, and has gained about 220% over the past 12 months. The surge has pushed the market capitalizations of Samsung Electronics and SK Hynix past $1 trillion each.

Goldman’s projection and the index move are linked to strength in memory chips and AI demand. The bank set 12,000 KRW as its target for the Kospi, while some market participants identify nearer-term resistance around 10,000 KRW.

Analysts and technical indicators highlight several risks. The recent advance has been concentrated in two memory-chip firms, and a slowdown in AI-driven demand or a drop in chip prices could reduce those companies’ earnings support. Forward price-to-earnings multiples are near 30 for Samsung and about 35 for SK Hynix.

Foreign investors have sold more than 6.5 trillion won of South Korean equities in recent months as they booked profits. Market technicians note the daily Relative Strength Index for the Kospi reached about 76, its highest level since May, a reading often associated with overbought conditions.

The Kospi is trading well above its 100-day moving average, which is near 6,157 KRW. Some analysts say that gap increases the chance of mean reversion. Market structure analysis places the Kospi in the markup phase of the Wyckoff framework, a phase that can be followed by distribution and then markdown.

Goldman frames its 12,000 KRW target as dependent on continued AI-related demand and renewed foreign inflows. The bank also cautioned that concentration in a few large chip names, elevated valuation metrics and ongoing profit-taking by foreigners are factors that could limit or reverse gains.