Korean stocks expected to reach 12,000 points, Nikkei to surge to 70,000 by year-end! Wall Street investment banks bullish on Japanese and Korean stock markets.

Korean stocks expected to reach 12,000 points, Nikkei to surge to 70,000 by year-end! Wall Street investment banks bullish on Japanese and Korean stock markets.

The wave of artificial intelligence continues to reshape the landscape of Asian capital markets, with major Wall Street investment banks intensively raising targets for the Japanese and Korean stock markets.

On June 3, according to Bloomberg, Goldman Sachs raised the 12-month target price for the Korean Composite Stock Price Index (KOSPI) from 9,000 points to 12,000 points—a substantial increase that implies approximately 36% upside from Tuesday’s closing price, making it one of the most aggressive bullish voices among Wall Street strategists.

Meanwhile, as reported by Wallstreetcn, Goldman Sachs and Citi have successively raised their targets for the Japanese stock market. Citi predicts that the Nikkei 225 index may break through 70,000 points before the end of the year, with a high estimate up to 72,000 points.

The concentrated statements from the two major investment banks provide new fundamental support for the recently strong Japanese and Korean stock markets. Goldman Sachs believes South Korea's earnings growth this year is expected to lead Asia with a rate of 320%, and the profit cycle driven by AI hardware investment will extend into 2028 and beyond; Citi emphasizes that no signals of a trend end have been seen in Japanese corporate earnings, ROE, and capital flows, making the medium- to long-term bullish logic intact.

Goldman Sachs Significantly Raises KOSPI Target, AI Chip Profit Cycle is the Core Driver

Goldman Sachs strategist Timothy Moe's team, in their latest report, raised the 12-month KOSPI target from 9,000 points to 12,000 points, an increase of 33%, placing it in the highest range among similar Wall Street forecasts—J.P. Morgan’s bullish scenario published in May stood at 10,000 points.

The core logic behind Goldman Sachs’ raise is the technology hardware profit supercycle driven by AI investment. The team expects South Korea’s earnings growth this year to reach 320%, ranking first in Asia, with strong performance from Samsung Electronics and SK Hynix being the main support.

KOSPI has already doubled this year, and Samsung Electronics, SK Hynix, and TSMC have all seen their market values surpass one trillion dollars within the past year. Goldman Sachs strategists wrote: “AI investment will drive continued strong profit growth for technology hardware into 2028 and beyond.”

Goldman Sachs has raised its KOSPI target several times this year, and this adjustment marks the largest increase so far. However, the team also points out risks: after a sharp rise, the market is “prone to profit-taking.” Foreign investors have had a net sale of $70 billion in South Korean stocks this year, and accumulation of speculative positions also increases the risk of a sharp drop.

Goldman Sachs recommends that investors use options structures for hedging but maintains a strategic bullish stance toward the South Korean market.

Goldman Sachs and Citi Raise Targets in Succession, Japanese Stock Market Year-End Target Points Directly to 70,000

Outside of Korea, the Japanese stock market is likewise receiving concentrated endorsements from Wall Street investment banks.

According to Wallstreetcn, Goldman Sachs in its latest “Japan Weekly Strategy Report” raised the 12-month target for the TOPIX index from 4,200 to 4,400 points, indicating an approximate 11% upside from current levels, and also increased EPS growth forecasts for FY26/27 to +11%/+11%, adding FY28 forecast of +9%. Goldman Sachs analysts Bruce Kirk and Julius Chan offered a triple driving logic: quarterly results exceeded expectations prompting upward EPS revisions, total net foreign inflows since April 2025 hit 16 trillion yen, and corporate shareholder returns reached historical highs.

Citi followed closely, with chief strategist Ryota Sakagami raising the TOPIX target to 4,500 points in the latest report, corresponding to a price-earnings ratio of 17.5x and projected EPS of 258.4 yen for the fiscal year ending March 2028, and estimating the Nikkei 225 high at 72,000 points, clearly stating a “breakthrough of 70,000 points by year-end.”

Citi’s core judgment: short-term pressure comes from companies' initial profit guidance being relatively conservative, triggering downward earnings revisions, rather than a collapse of the earnings fundamentals. TOPIX constituent companies plan revenue growth of 4.2% year-on-year, operating profit growth of 8.2%, and net profit growth of 7.6%; while profit growth is below prior consensus, it is not out of control.

Citi especially emphasizes the sustained strengthening of Japanese companies’ pricing power—the transmission of import costs to company prices is smoother than before. For companies where "revenue guidance exceeds expectations, profit guidance falls short," if subsequent price hikes are realized, profit estimates may actually be revised upward.

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