Goldman Sachs maintains its bullish outlook on Korean stocks and forecasts the KOSPI index will reach 12,000 within the next 12 months, representing over 20% upside from current levels, according to a report released July 5 (local time). The investment bank's projection comes despite recent volatility that triggered circuit breakers as semiconductor stocks experienced sharp swings, testing investor sentiment. Korea recorded the highest returns among Asian stock markets in the first half of 2026, with the KOSPI nearly doubling, driven primarily by artificial intelligence-related stocks including Samsung Electronics and SK Hynix, though Goldman Sachs expects the rally to broaden to other sectors in the second half.
Goldman Sachs Sets 12,000 KOSPI Target Within 12 Months
Goldman Sachs stated in its July 5 report that "Korea is the stock market with the highest returns in Asia in the first half of 2026, with the representative index KOSPI rising nearly double." The investment bank acknowledged that "recent sharp fluctuations in semiconductor stocks triggered circuit breakers, putting investor sentiment to the test and acting as a burden on the rally."
Despite concerns about the rally being concentrated in AI-related stocks such as Samsung Electronics and SK Hynix, Goldman Sachs analysts projected that the upward momentum will expand beyond AI memory semiconductor trading to other sectors in the second half. The bank noted that "earnings momentum is gradually improving across other sectors as well," highlighting energy, materials, and industrials as areas to watch.
Rally Expected to Broaden Beyond AI Semiconductor Stocks
Goldman Sachs analysts stated that "additional foreign capital inflows have already begun moving to other AI beneficiary stocks and industrials," adding that "this trend will continue as investors seek broader AI supply chain opportunities and investment opportunities with low correlation to AI."
The investment bank assessed that while the rally has been concentrated in specific sectors, the expansion is already underway. Analysts explained that "additional foreign capital inflows have already begun moving to other AI beneficiary stocks and industrials" and expect this trend to continue as investors diversify their portfolios.
Retail Investor Positions Below Overheated Levels
Addressing concerns about market overheating, Goldman Sachs determined that retail investor positions remain far from typical overheated market levels. Analysts explained that "while individual investment activity has increased, investor exposure is still far below levels generally considered market overheating."
The report noted that "a significant portion of the increase in leveraged exchange-traded fund (ETF) assets came from valuation increases due to stock price rises, not new borrowing." Goldman Sachs analysts added that "household assets are still heavily allocated to real estate, cash, and especially overseas stocks centered on U.S. stocks, so Korean investors have ample room to further increase their allocation to Korean stocks if market conditions remain favorable."
Earnings Growth Forecast at 320% for 2026
Goldman Sachs projected that corporate earnings growth will continue very strongly, forecasting earnings to increase 320% in 2026 and an additional 35% in 2027. The investment bank also assessed that valuations of stocks excluding Samsung Electronics and SK Hynix remain reasonable compared to competing markets in the Asia region.
Goldman Sachs stated that the KOSPI will reach the 12,000 level within the next 12 months, representing over 20% additional upside from current levels. However, the bank noted that this process will "follow a rough path" rather than a smooth trajectory.
![KOSPI Index Trend Daily Chart]()
KOSPI index trend daily chart. Source: Yonhap Infomax
FAQ
What is Goldman Sachs' target for the KOSPI index?
Goldman Sachs forecasts the KOSPI index will reach 12,000 within the next 12 months, representing over 20% upside from current levels, according to a report released July 5 (local time).
Why does Goldman Sachs expect the Korean stocks rally to broaden?
Goldman Sachs analysts stated that earnings momentum is gradually improving across other sectors beyond AI memory semiconductors, with additional foreign capital inflows already moving to other AI beneficiary stocks and industrials. The bank highlighted energy, materials, and industrials as sectors to watch.
How does Goldman Sachs assess retail investor positioning in Korean stocks?
Goldman Sachs determined that retail investor positions remain far below levels generally considered market overheating, noting that while individual investment activity has increased, investor exposure is still well below typical overheated market levels, and a significant portion of leveraged ETF asset increases came from valuation gains rather than new borrowing.
