Goldman Sachs has maintained its KOSPI target of 12,000, assessing that the earnings cycle duration of South Korean memory semiconductor companies is being underestimated.
Bloomberg reported that Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, stated, "We are still maintaining our KOSPI outlook issued last June, based on the judgment that earnings will be supported."
Previously, he raised the KOSPI target from 9,000 to 12,000 in early June, and early last month, he characterized the June decline as a steep correction within a major bull market, maintaining the target.
He projected that the memory supply shortage driven by data center competition will intensify further next year.
He also expected the capital expenditure scale of U.S. Big Tech next year to be revised upward from the previous forecast of 800 billion dollars to 1.2 trillion dollars.
"Hyperscalers are in a situation where they must continue spending even if they do not make money," he explained, adding, "This is good for memory because it drives computing demand that requires a massive amount of memory."
He argued that if South Korean companies achieve their earnings forecasts, the KOSPI 12,000 target "will not look absurd."
In the securities industry as well, expectations for a revaluation are following consecutive plunges in the stock prices of Samsung Electronics and SK Hynix from their peaks.
Stock prices have dropped to about 3 times the price-to-earnings ratio based on projected earnings for 2027, but next year's expansion of artificial intelligence investments could lead to a supply shortage where memory fails to keep up with demand.
KB Securities stated regarding next year's memory market that "the tightest supply environment in history will unfold," presenting the two companies as top picks in the semiconductor sector.
Nomura Securities also announced on September 4 that the two companies have entered an extreme undervaluation zone, maintaining buy ratings while keeping the target prices for Samsung Electronics and SK Hynix at 670,000 won and 4.7 million won, respectively.
However, Citigroup lowered the target prices for the two companies to 430,000 won and 3 million won, respectively, reflecting earnings pressure caused by a strong won.
While maintaining a positive outlook on the KOSPI for the time being, including the two companies, Goldman Sachs pointed to risks from competitors such as China's CXMT and the possibility of political backlash against the expansion of U.S. data center construction as variables.
(Reported by Jung Da-eun | Video by Ahn Jun-hyeok | Graphics by Lee Su-min | Produced by SBS Digital News)
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