By JBizNews Desk

June 3, 2026

South Korea’s stock market has already delivered the kind of gains most investors would expect over a decade. Goldman Sachs says the rally may still be far from over.

The investment bank raised its 12-month target for South Korea’s benchmark KOSPI Index to 12,000 in a research note published Wednesday in Seoul, implying more than 35% upside from Tuesday’s record close. The call keeps Korea as Goldman’s highest-conviction equity market anywhere in Asia and comes after a run that has already made it the best-performing major stock market in the world this year.

That Tuesday close was historic in its own right. The KOSPI finished at 8,801.49, its third consecutive all-time high, after briefly surging within roughly 66 points of the never-before-seen 9,000 level before profit-taking pulled the market lower. The index has now gained approximately 100% in 2026, a performance that leaves even the strongest U.S. benchmarks trailing far behind. Neither the S&P 500 nor the Nasdaq Composite has come close to matching Korea’s advance.

The explanation starts with one word: AI.

At the center of the rally sit two companies — Samsung Electronics and SK Hynix — which dominate the global market for high-bandwidth memory, or HBM. These advanced chips are essential components inside the artificial-intelligence servers powering data centers around the world. As companies race to build AI infrastructure, demand for HBM chips has exploded, pushing prices higher and creating a windfall for the Korean firms that supply them.

Investor enthusiasm accelerated again Tuesday after reports that Samsung Electronics became the first company in the industry to ship samples of its next-generation HBM4E memory chips. Samsung shares climbed 3.3%, while SK Hynix, after a massive rally of its own, finished little changed.

The market’s dependence on those two companies is extraordinary. According to JPMorgan, memory-chip stocks now represent roughly half of the KOSPI’s total weighting and account for approximately 70% of the market’s gains this year. When Samsung and SK Hynix rise, the entire Korean market tends to follow.

Goldman’s optimism rests on earnings growth that would be extraordinary even by historical standards. Strategists led by Timothy Moe, Goldman’s Chief Asia-Pacific Equity Strategist, project Korean corporate profits will surge approximately 300% during 2026. The firm described it as the strongest annual earnings expansion seen in any Asian market since the region recovered from the 1997-98 Asian Financial Crisis.

“Earnings are driving Asian equity returns,” Moe wrote, reiterating Korea as Goldman’s top regional investment idea.

Wall Street is increasingly competing to keep pace with the rally. JPMorgan recently raised its bull-case target for the KOSPI to 10,000, while Citigroup has also upgraded its outlook. In several cases, analysts have found themselves revising targets upward almost immediately after the market surpassed their previous forecasts. Goldman itself was targeting 9,000 only weeks ago.

The surge has transformed South Korea’s standing in global finance. According to Bloomberg data, the country has overtaken India to become the world’s sixth-largest stock market, with total market capitalization climbing approximately 86% this year to about $5.04 trillion.

Government policy has helped support the advance. Seoul’s “Value-Up” initiative encourages publicly traded companies to improve shareholder returns, increase transparency, and boost corporate governance. The Korea Exchange says more than 700 companies have already submitted value-enhancement plans under the program.

Economic fundamentals have also strengthened. South Korean exports reached a record $87.8 billion in May, fueled largely by booming semiconductor shipments. Those figures provide tangible support for a market increasingly driven by expectations surrounding artificial intelligence.

The AI connection extends directly to the United States. Nvidia Chief Executive Jensen Huang recently met with SK Group Chairman Chey Tae-won to discuss deeper cooperation in advanced memory technology, highlighting the central role Korean suppliers play in powering the global AI boom.

Still, not everyone is convinced the rally can continue indefinitely.

Volatility has increased sharply. Tuesday alone saw a swing of more than 430 points, as foreign investors sold a net 6.6 trillion won worth of Korean stocks while domestic institutions stepped in to buy. Local commentators have increasingly drawn comparisons to previous speculative periods, including the 1999 dot-com boom and the years surrounding the 1997 Asian Financial Crisis.

The Korean currency has offered another note of caution. The won weakened to approximately 1,516 per U.S. dollar, suggesting the stock-market boom is not necessarily translating into strength across the broader economy.

For global investors, however, the story remains straightforward.

The Korean rally is fundamentally a bet on artificial intelligence. As long as demand for AI computing power continues to grow, and as long as Samsung Electronics and SK Hynix remain indispensable suppliers of advanced memory chips, the momentum behind the market could continue.

If that thesis proves correct, Goldman’s 12,000 target may not look so aggressive after all.

If it proves wrong, a market that has already doubled in a single year could face a difficult reckoning.

Seoul — JBizNews Desk

© JBizNews.com All Rights Reserved. Reproduction or distribution without written permission is prohibited.