Just three trading days after the KOSPI broke through the 7,000 level, it is now within sight of the 8,000 mark. As major domestic and overseas securities firms raise their target indexes one after another, some corners of global investment banks (IBs) are even floating projections for KOSPI 10,000.
According to the Korea Exchange (KRX) on the 11th, the KOSPI broke through the 7,840 level intraday, again setting a record high. After settling above 7,000 on the 6th, it has drawn a steep upward curve and looks set to change the leading digit in just three days. Amid the market's frenzied run, Goldman Sachs raised its target to the 9,000 level, and some IBs including JP Morgan have mentioned the possibility of the KOSPI reaching 10,000 under a bull-case scenario.
JP Morgan set a base-case target for the KOSPI at the 9,000 level and said it could reach the 10,000 level in a bull-case scenario. This is the result of raising, in just about two weeks from late Apr., the previously presented 7,000–8,500 outlook by 2,000 points and 1,500 points, respectively.
JP Morgan said, "Key market fundamentals such as the memory cycle, governance reform, and theme-based growth remain on track," adding, "Under these unique conditions, it is appropriate to maintain positioning for further upside rather than preemptively calling the end of the cycle."
Goldman Sachs, about 20 days after setting the KOSPI target at the 8,000 level, raised the target again to the 9,000 level on the 8th. Citigroup also sharply raised its KOSPI target in a recent report from the 7,000 level to the 8,500 level.
Domestic securities firms are likewise moving to raise their KOSPI targets. Hyundai Motor Securities on the day projected the KOSPI index could reach as high as 12,000 points. Yuanta Securities Korea also said in a report the same day that the KOSPI could climb to as high as 11,600 points in the second half of this year. Earlier, NH Investment & Securities and Daishin Securities had presented 9,000 points and 8,800 points, respectively.
In particular, Hyundai Motor Securities projected the KOSPI would rise to 9,750 points by the end of this year, presenting 12,000 points for the bull-case scenario and 6,000 points for the bear-case scenario.
Kim Jae-seung, a researcher at Hyundai Motor Securities, said, "On the upside, based on confidence in MoneyMove and the long-term earnings of the semiconductor sector, we project a short-term spike to 12,000 points," adding, "On the downside, assuming some corporations fall behind as AI competition intensifies, we present a decline to 6,000 points."
Semiconductors are cited as the reason global IBs and the securities industry are racing to raise KOSPI targets. JP Morgan said, "AI-led demand continues to outstrip supply, and memory semiconductor inventories are also tight," adding, "Because high-bandwidth memory (HBM) supply is fixed under contracts, price increases for memory semiconductors will continue."
Goldman Sachs also said, "Although Korea's stock market has shown the strongest upward momentum among major global markets this year, there is still room for further gains," adding, "The market has not fully reflected the sustainability of earnings in the memory semiconductor sector."
Kim said, "The domestic semiconductor sector's 12-month forward price-earnings ratio (PER) is at a historical trough," adding, "The KOSPI semiconductor sector's 12-month forward PER is currently 5.17 times, below the 20-year average of 10 times."
While the semiconductor sector's 12-month forward net income has surged 293%, market capitalization has risen only 135%, driving the PER lower. In fact, the sector's 12-month forward net income has soared from 136.7 trillion won at the end of last year to 537 trillion won as of the 8th. Accordingly, the sector's 12-month forward PER has ample room to rise to 6.25 times in the base case and to 8 times in the bull-case scenario.
Yuanta Securities Korea said, "The domestic and overseas market cycles share the lifespan and trajectory of the market leaders," adding, "In other words, when the leaders die, the bull-market cycle ends, and when the market cycle shifts, leadership among the leading stocks also changes significantly."
It added, "The bull-market cycle in domestic and overseas markets is highly likely to become a trend in the second half, and as long as the current bull-market cycle continues, investors' inertial approach toward semiconductors, the leading sector, will continue," analyzing that, "The emergence of new leaders is a task for after a full-fledged trend reversal into a bear market."
However, analysis suggests the 12-month forward PER for non-semiconductor sectors stands at 13.4 times, above the 20-year average of 10.8 times. In non-semiconductor sectors, earnings have not risen significantly, but market capitalization has climbed more.
Given that the semiconductor sector is currently driving gains in the KOSPI index, attention should also be paid to whether capital expenditure (CAPEX) projections for hyperscalers continue to expand beyond 2027.