Goldman Sachs cuts Kospi 12-month target as AI trade concerns deepen
South Korean equities remain under pressure after a sharp retreat from their June peak, prompting a reset in market expectations for the benchmark Kospi Index. Goldman Sachs strategists now see a lower 12-month target for the gauge, although their revised forecast still points to significant upside from current levels.
Highlights
- Goldman Sachs cut its 12-month Kospi Index target by 25% to 9,000 from 12,000 due to deepening AI trade concerns.
- The revised target follows a more than 35% drop in the Kospi from its June peak, prompting more conservative valuation assumptions.
- Despite the downgrade, Goldman’s new forecast still implies over 60% upside from current levels, suggesting Korean equities remain highly undervalued.
Revised outlook after steep market decline
As reported by Bloomberg, Goldman Sachs Group Inc. strategists cut their 12-month target for South Korea’s Kospi Index by 25% to 9,000 from 12,000 as concerns over the artificial intelligence trade intensify.The analysts, including Timothy Moe, say the revision follows more conservative valuation assumptions after the benchmark falls more than 35% from its June peak. The bank had raised its target repeatedly earlier this year before reversing course in its latest outlook.
Implications for South Korea’s equity market
Despite the downgrade, the strategists say the recent selloff leaves Korean equities highly undervalued. On their revised target, the forecast still implies more than 60% upside from current levels.The change in view highlights how quickly sentiment around AI-linked trades is weakening and how that shift is feeding into broader equity market expectations in South Korea. For investors, the new target suggests Goldman still sees recovery potential, but with a more cautious framework for valuing the market.
In our earlier coverage of the AI-linked tech selloff driven by funding and rate concerns, we explained how hotter-than-expected U.S. inflation data reignited expectations of further Fed tightening and triggered a sharp pullback in major technology and chip names. We also noted that investors were reassessing the rising cost of financing large-scale AI infrastructure, amplifying risk-off moves across both U.S. and Asian markets.
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