Goldman's Timothy Moe doubles down on 12,000 Kospi call as AI-fueled memory cycle stretches on

Moe stands firm on a bold target

If 12,000 on the Kospi sounds punchy, Timothy Moe is unfazed. The Goldman Sachs Group Inc. strategist said Friday, "We're still holding to it - it's driven by what we think will be earnings delivery," adding that "The market is underpricing the duration of this earning cycle." He first floated the 12,000 figure three months ago, making it one of the most optimistic targets around at the time, and it still points to almost 80% from where the index trades today.

What's behind the call

Moe's math is straightforward: he values the index at 7.5 times forward earnings. Right now the Kospi is valued at about 5.3x, which is nearly 50% below its own seven-year average. If Korean companies hit his earnings marks, he argues the 12,000 figure "isn't as crazy as it might appear." He expects profits for Kospi constituents to surge roughly 360% this year before settling to around 35% growth in 2027, and says the eventual slowdown is already baked into expectations.

AI buildout is still a tailwind

Despite a 27% slide from June's record high, pulled down by worries over the durability of Big Tech's AI splurge and jumpy Korean volatility, the demand story underneath keeps building. A global scramble to add data centers has left memory and storage chips in tight supply, pushing prices higher. Moe thinks that supply squeeze and price strength will get even more pronounced in 2027.

He also notes that US Big Tech capital outlays are now pegged at north of $1.2 trillion next year, a sharp lift from earlier $800 billion projections. The hyperscalers "have to continue to spend even if they don't make money," he said. "It's great for memory because it's going to drive compute demand, which is very memory intensive." Even so, another burst of strong results from Samsung Electronics Co. and SK Hynix Inc. has not translated into a sustained rally in their shares.

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Risks to watch, and what it means for your money

Moe flags competitive pressure from Chinese players like CXMT Corp. and the chance of political blowback slowing the US data-center rollout. Even so, he believes the backdrop still skews positive for advanced memory makers over the next couple of years. The takeaway for a regular portfolio: Korea's market is priced well below its own history on earnings, and if the AI buildout keeps pulling on memory demand the way Moe expects, swings aside, the earnings lever could carry more weight than the headlines.