Goldman Sachs Lifts KOSPI Target to 9,000 Points

Goldman Sachs has raised its KOSPI index target for the next 12 months to 9,000 points from the previous 8,000 points. It projects that key sectors, including semiconductors, could achieve profit growth of 300% this year.

The report analyzes that the memory semiconductor boom, a key driver of the South Korean stock market, is still undervalued by the market. Goldman Sachs anticipates that memory semiconductor companies will continue to maintain high profitability. Despite the recent rise in the KOSPI index, the overall market is still diagnosed as undervalued.

The shortage of memory semiconductors, such as DRAM and NAND flash, is expected to continue at unprecedented levels, leading to a sharp increase in prices. This surge in memory semiconductor demand is attributed to the rapid increase in investment in AI data servers by big tech and cloud-related companies. The firm stated that extended long-term contracts from clients and the widespread adoption of AI technology will drive the memory semiconductor boom.

The South Korean stock market has long shown limitations in its growth due to the 'Korea Discount,' where it has been undervalued compared to global markets. Efforts by the government to resolve the Korea Discount have led companies to improve corporate governance and strengthen shareholder-friendly policies. This combination of policy efforts and the global AI investment fervor has resulted in a significant inflow of investment capital into the Korean stock market.

Among Asian countries, Goldman Sachs has the strongest conviction in the South Korean stock market, presenting an investment opinion of 'Overweight.'