{"slug": "goldman-says-korea-s-ai-stock-selloff-has-gone-too-far-doubles-down-on-bull-case", "title": "Goldman says Korea's AI-stock selloff has gone too far, doubles down on bull case", "summary": "Goldman Sachs is maintaining its bullish stance on South Korean equities, reiterating an overweight rating and a 12-month Kospi target of 12,000, which implies about 80% upside, despite a recent selloff that has left market positioning cleaner. The bank argues that the memory chip cycle will be stronger and last longer than previous ones, with shortages potentially lasting through 2030, and that current pricing does not reflect this prospect. Goldman's analysts note that while concerns over Big Tech capital spending and competition are valid, they do not overturn the view that the AI-hardware cycle will be unusually large and long.", "body_md": "# Goldman says Korea's AI-stock selloff has gone too far, doubles down on bull case\n\n[Business Insider](https://www.businessinsider.com)\n\nGoldman Sachs says Korea's AI-stock rout has left market positioning much cleaner, reinforcing its bullish Kospi call.\n\n- Goldman Sachs is doubling down on its bullish call on Korea after the AI stock rout.\n- It's keeping its 12,000 Kospi target, implying around 80% upside.\n- The bank says the market has become too pessimistic.\n\nSouth Korea's [stock-market selloff](https://www.businessinsider.com/korea-kospi-stock-market-index-july-performance-sk-hynix-samsung-2026-7) has gone too far, Goldman Sachs said, doubling down on its bullish call for the country's equities despite weeks of violent market swings.\n\nOn Wednesday, the country's [benchmark](/glossary/benchmark) [Kospi index](https://markets.businessinsider.com/index/kospi) rose 4% by midday. Index heavyweights Samsung Electronics and SK Hynix gained 4% and 6%, respectively.\n\nGoldman reiterated its overweight rating on Korean equities and its 12-month Kospi target of 12,000 in a Tuesday note. The target implies about 80% upside from current levels.\n\nThe bank's conviction rests largely on the outlook for memory chips.\n\n\"Our central case is that the memory cycle is likely to be stronger and last longer than previous ones and that current market pricing does not reflect this prospect,\" Goldman's analysts wrote.\n\nAccelerating demand for AI computing and severe memory shortages, potentially lasting through 2030, should support chip prices and profits for longer than investors expect, they wrote.\n\nThe Kospi's wild swings matter beyond South Korea because the benchmark has become an increasingly important gauge of the AI trade, with moves in Samsung and SK Hynix rippling through chip stocks across Asia and on [Wall Street.](https://www.businessinsider.com/kospi-index-korea-stock-market-nasdaq-ai-trade-samsung-hynix-2026-7)\n\nConcerns over Big Tech's capital spending, its ability to finance that investment, and intensifying competition are valid, the analysts said. But they do not overturn Goldman's view that the current AI-hardware cycle will be unusually large and long.\n\nThe recent sell-off suggests investors are underestimating how long strong profit growth can continue for Korean memory-chip makers, according to Goldman.\n\nSamsung Electronics and SK Hynix together account for about half of the Kospi, making their outlook central to the broader market. Goldman also sees opportunities beyond memory chips, including companies in power infrastructure, industrial automation, defense, shipbuilding, [robotics](/category/robotics), and energy.\n\nGoldman's call follows a historic boom-and-bust. The Kospi more than doubled in the first half of the year before plunging 22% in July, one of its steepest monthly declines on record.\n\nThe speed and scale of the decline were comparable with some of the market's sharpest corrections over the past two decades, including those following the 2021 tech boom, the Covid outbreak, and the dot-com bust in the early 2000s, Goldman noted.\n\n## The leverage unwind\n\nThe roller-coaster ride has also become a [cultural phenomenon](https://www.businessinsider.com/young-south-korean-investors-humor-cope-kospi-stock-market-rout-2026-8) in South Korea.\n\nYoung investors have posted screenshots of battered portfolios, dancing videos, and jokes about surviving on instant ramen as they use humor to cope with heavy losses. Some had invested with borrowed money during the AI-fueled rally.\n\nThe tumult was partly driven by [leveraged exchange-traded funds, ](https://www.businessinsider.com/kospi-stock-index-sk-hynix-samsung-share-price-retail-investors-2026-7)which amplified the market's decline through technical selling.\n\nAssets in Korean leveraged ETFs have fallen 54% from a June peak of $53 billion to $25 billion, while retail margin-loan balances have dropped from $25 billion to $19 billion, according to Goldman's analysis.\n\nWith retail investors reducing borrowed positions, regulators tightening rules on leveraged products, and hedge funds cutting their exposure, market positioning is now \"much cleaner,\" the bank's analysts wrote.\n\n\"The market is pricing a more negative fundamental outlook than warranted and expect it to stabilize and resume its upward trend as positioning clears and newsflow corroborates the earnings outlook.\" Goldman analysts wrote.\n\n[Business Insider](https://www.businessinsider.com/kospi-stock-market-index-today-goldman-sachs-forecast-outlook-8)\n\nGet AI news in your inbox\n\nDaily digest of what matters in AI.", "url": "https://wpnews.pro/news/goldman-says-korea-s-ai-stock-selloff-has-gone-too-far-doubles-down-on-bull-case", "canonical_source": "https://www.machinebrief.com/news/goldman-says-koreas-ai-stock-selloff-has-gone-too-far-double-lxfr", "published_at": "2026-08-05 05:28:51+00:00", "updated_at": "2026-08-05 06:35:26.449819+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-chips"], "entities": ["Goldman Sachs", "Kospi", "Samsung Electronics", "SK Hynix"], "alternates": {"html": "https://wpnews.pro/news/goldman-says-korea-s-ai-stock-selloff-has-gone-too-far-doubles-down-on-bull-case", "markdown": "https://wpnews.pro/news/goldman-says-korea-s-ai-stock-selloff-has-gone-too-far-doubles-down-on-bull-case.md", "text": "https://wpnews.pro/news/goldman-says-korea-s-ai-stock-selloff-has-gone-too-far-doubles-down-on-bull-case.txt", "jsonld": "https://wpnews.pro/news/goldman-says-korea-s-ai-stock-selloff-has-gone-too-far-doubles-down-on-bull-case.jsonld"}}