KOSPI surges 3% as AI optimism returns and Goldman backs 12,000 target

South Korea’s KOSPI surged about 3% on Monday, leading gains across Asia as investors piled back into semiconductor stocks on renewed optimism over artificial intelligence demand.

The benchmark opened 3.34% higher at 6,910.78 and was up 2.97% at 6,886.09 by late morning in Seoul.

Samsung Electronics gained 4.91% and SK Hynix jumped 8.4%, while foreign and institutional investors returned as net buyers.

The rally came despite stronger US jobs data, rising oil prices and lingering expectations that the Federal Reserve could still raise rates this month.

Chip stocks put KOSPI back in the lead

The KOSPI’s rebound was driven overwhelmingly by technology. The PHLX Semiconductor Index rose 3.38% on Friday after OpenAI unveiled GPT-6 Astra, helping revive expectations for another leg of AI-related memory demand.

That momentum carried into Seoul, where SK Square rose 5.67% and Hanmi Semiconductor gained 5.43%.

Seoul Economic Daily reported that foreigners and institutions together bought about 768.4 billion won of shares early in the session, while retail investors sold about 812.2 billion won. Buying was concentrated in large-cap chipmakers.

The bullish case is also being reinforced by the supply outlook.

KB Securities expects memory inventories at Samsung and SK Hynix to remain tight and sees next year’s DRAM and NAND demand exceeding supply by more than 10 percentage points, according to Seoul Economic Daily.

Mirae Asset has raised its Samsung target to 400,000 won and its SK Hynix target to 3.1 million won.

Goldman’s 12,000 target raises the stakes

The rally also revived attention on one of Wall Street’s boldest calls on Korean equities.

Goldman Sachs Asia-Pacific equity strategist Timothy Moe is sticking with a 12-month KOSPI target of 12,000, implying close to 80% upside from current levels.

Moe’s view is that investors are underestimating how long the AI-driven memory cycle can last and how much earnings leverage that creates for Korean chipmakers.

Goldman sees the index trading at roughly 5.3 times forward earnings, well below the valuation embedded in its target.

Across Asia, Japan’s Nikkei rose 2.2%, Chinese blue chips added 0.2% and MSCI’s Asia-Pacific index outside Japan climbed 1.1%.

European futures were softer, with EURO STOXX 50, DAX and FTSE contracts all down about 0.1%, while S&P 500 and Nasdaq futures were fractionally lower during the US holiday.

Oil and rate risks still cap the upside

The macro backdrop remains less comfortable.

Brent crude rose about 0.7% towards $97 a barrel and WTI gained roughly 0.8% to above $92 after fresh US-Iran attacks around the Strait of Hormuz.

ANZ analysts told The Wall Street Journal that the latest escalation reduced the chances of a quick normalisation in Middle East oil flows.

Higher energy prices add to inflation concerns before Friday’s US CPI report.

The 10-year Treasury yield remained near 4.78%, while markets were assigning roughly a 58% probability to a September Fed increase.