Goldman Raises MSCI Asia Pacific ex-Japan Target

Goldman said the improvement was led by Korea, Taiwan and Singapore, with Singapore and Taiwan producing the largest number of companies that topped forecasts. That matters because the region’s recent market leadership has been concentrated in semiconductor and hardware exporters benefiting from AI-related spending, while weaker domestic demand in parts of Australia, Malaysia and India has left those markets behind.

The bank said it favors North Asia and AI-related tech hardware, along with energy security, defense and shareholder returns. Its preferred sectors include tech hardware and semiconductors, capital goods, healthcare and non-Australian or Chinese banks, while transportation, utilities and autos are underweight.

Goldman’s call also highlights a sharp divergence across markets. It rates Japan, Korea, China A shares and Taiwan overweight, while keeping Singapore, Hong Kong, Malaysia, India and offshore China at market weight. Australia, Thailand, Indonesia and the Philippines remain underweight.

The most aggressive part of the view is on South Korea, where Goldman lifted its 12-month Kospi target to 12,000 from 9,000 in May, implying roughly 79% upside from current levels. The upgrade follows a rally in AI-linked chip names such as Samsung Electronics and SK Hynix, which have helped pull the broader index higher.

For investors, the message is that Asia’s next leg may depend less on broad regional growth and more on whether earnings momentum in semiconductors and AI hardware continues to justify higher valuations. Goldman still sees a “more supportive backdrop” for Asian equities, citing strong tech-driven earnings, attractive valuations in selected markets and cleaner positioning after recent unwinds.

With U.S. midterm elections, Middle East tensions and elevated bond yields still hanging over risk assets, the near-term test will be whether the earnings rebound spreads beyond a handful of tech-led markets. The next catalyst is the pace of revisions to Korean and Taiwanese corporate profits, especially from chipmakers and exporters tied to AI capital spending.