# JPMorgan lifts Kospi target to 12,500, keeps Korea top Asia pick > Source: > Published: 2026-06-25 05:37:15+00:00 JPMorgan on Thursday raised its 12-month target for South Korea's benchmark Kospi, keeping the country as its top equity market in Asia on expectations that AI-driven earnings will outweigh heavy foreign selling and volatility. The bank lifted its base-case Kospi target to 12,500, up from its previous target of 10,000 given in May. It also set a bull-case target of 15,000 and a bear-case target of 8,000. In a report released Thursday, JPMorgan strategists said investors should add exposure on pullbacks and maintain maximum exposure to Korea, citing AI-driven earnings, broader industrial growth, potential financial-sector gains and support from corporate-governance reforms. "We remain directionally bullish on Korea equities despite ongoing forced foreign selling and elevated volatility," JPMorgan strategists said, adding that both pressures are likely to persist. The call underscores the growing importance of Korea's memory-chip sector to the broader economy. JPMorgan said profits from AI-linked chipmakers are now large enough to affect corporate income, household wealth and government tax revenue. The bank said Korea remains one of the clearest equity-market plays on the global AI cycle, which it described as still strong. Its analysts continue to expect a "higher-for-longer" memory cycle, helped by pricing power that has made Korean technology earnings highly sensitive to AI data-center spending. Still, the bank warned the rally could see sharp pullbacks if confidence in the AI trade weakens, citing concerns over pricing, Chinese competition, export controls and new equity and debt supply. Market structure is adding to the swings. JPMorgan said leveraged exchange-traded funds tied to Korean equities have grown to about $50 billion in assets, amplifying moves through futures, options and cash-market activity and pushing implied volatility sharply higher. Foreign selling remains another drag. JPMorgan estimated overseas investors have sold about $95 billion of Korean equities this year, with more than 90 percent of the outflows concentrated in the two major memory names. The bank said those stocks have become so large that some emerging-market investors are hitting mandate limits, forcing them to sell into rallies. That pressure has also weighed on the won, though JPMorgan said potential Bank of Korea rate hikes and seasonal tax-related flows in August could provide some support. Domestic investors have absorbed much of the foreign selling, with JPMorgan estimating Korean individuals bought about $80 billion of local equities this year, including ETF inflows. The bank said retail demand may continue as households bring money back from overseas stocks and property investment remains constrained. JPMorgan's upgrade adds to a series of bullish calls from global investment banks, suggesting confidence in Korean equities remains intact despite the Kospi's sharp swings after breaking above the 9,000 mark last week. Goldman Sachs recently raised its Kospi target to 12,000, while Morgan Stanley lifted its target to 10,500, as major foreign brokerages continue to cite Korea's AI earnings momentum as a key driver for further gains. jwc@heraldcorp.com