[Edaily Reporter KIM JUNG YOU ] "Investors are underestimating how long the positive impact of artificial intelligence (AI) will last for South Korean memory semiconductor companies."

Timothy Mo, Chief Equity Strategist for Asia-Pacific at Goldman Sachs, stated in an interview with Bloomberg on the 7th, “We are maintaining our existing KOSPI target of 12,000,” adding, “This is based on the likelihood of earnings being met.” Previously, Goldman Sachs had projected the South Korean KOSPI index to reach 12,000, which is 80% higher than the current index level.

His optimism stands in contrast to the current market situation—which has fallen 27% from its June peak—amid concerns over the sustainability of the AI investment boom among Big Tech companies and a sharp rise in volatility in the South Korean stock market. Strong earnings from major semiconductor companies such as SamsungElectronics(005930)and SK hynix(000660) have also failed to significantly boost stock prices.

One strategist noted, “The market is underestimating the duration of this earnings cycle,” adding, “Global competition to build data centers is causing extreme shortages of memory and storage chips, driving up prices, and this dynamic is expected to intensify next year.”

Consequently, he estimated that U.S. Big Tech spending next year will exceed $1.2 trillion, an upward revision from the previous forecast of $800 billion. He added, “Even if major cloud service providers (hyperscalers) fail to turn a profit, they must continue investing,” noting that “this is positive for the memory industry because it drives memory-intensive computing demand.”

One strategist predicted that the net profit growth rate of KOSPI-listed companies would reach 360% this year and slow to about 35% next year. He explained, “It is already well known in the market that the pace of profit growth will gradually begin to slow.”

He emphasized, “While I acknowledge the risks posed by Chinese competitors such as Changxin Memory (CXMT) and political backlash against the construction of U.S. data centers, it remains an undeniable fact that fundamentals will continue to favor high-performance memory semiconductor companies for the next few years.”

In addition, a strategist revealed that the KOSPI target of 12,000 was calculated based on a forward price-to-earnings (P/E) ratio of 7.5. He explained that the KOSPI is currently trading at 5.3 times, which is only about half of the seven-year average. He emphasized, “If Korean companies meet their earnings forecasts, a KOSPI target of 12,000 is not as far-fetched as one might think.”