Goldman’s Pivot: 25% Cut to KOSPI Target as AI Enthusiasm Fades

In a significant shift from its earlier bullish stance, Goldman Sachs has sharply lowered its outlook for South Korea’s benchmark stock index. The investment bank’s strategy team, led by Timothy Moe, reduced the 12-month target for the KOSPI index from 12,000 points to 9,000—a downward revision of 25%. This move underscores a rapidly changing investment landscape.

Behind the Revision: Cooling Sentiment and a Harsh Market Reality

The decision follows a notable cooling in the global artificial intelligence investment trade, which had previously fueled market gains. Compounding this shift, the KOSPI has plunged more than 35% from its June peak, prompting analysts to adopt a more guarded stance in their valuation assumptions.

“Market conditions have evolved,” Goldman noted in its report. “Our updated forecast incorporates a more conservative view on growth and risk premiums, reflecting the current macro and sector-specific headwinds.”

The Silver Lining: Deep Undervaluation Points to Substantial Upside

Despite the lowered target, the message from Goldman isn’t entirely negative. The bank emphasized that the recent sell-off has pushed Korean equity valuations into deeply undervalued territory. From a value perspective, many quality companies now trade at attractive levels.

Consequently, even the revised target of 9,000 points implies the KOSPI could rally more than 60% from its current level. For investors willing to look beyond near-term volatility, the market correction may be creating a compelling long‑term entry point.

  • Key change: Target cut from 12,000 to 9,000 points.
  • Primary driver: Fading AI‑led momentum and rising risk aversion.
  • Potential opportunity: Sharp decline leaves valuations depressed, with significant room for recovery.

Goldman’s update highlights a classic market dynamic: short‑term caution paired with longer‑term opportunity. As the AI frenzy settles, focus is likely to return to corporate fundamentals and earnings—factors that could ultimately drive Korea’s market recovery.