Overseas investment banks (IBs) and domestic brokerages are raising their KOSPI targets into the 10,000s one after another, adding momentum to market optimism. Despite continued uncertainty over the U.S.-Iran war, foreign selling, and the possibility of rate hikes, the boom in the semiconductor industry led by Samsung Electronics and SK hynix is fueling expectations for share-price gains.

Private bankers (PBs) said it is “time to follow the AI-related investment trend, including semiconductors, rather than deposits or bonds,” while advising that borrowing to invest is risky.

In a report that day, Goldman Sachs raised its 12-month KOSPI target from 9,000 to 12,000, a 36.3% increase in just a month.

Goldman Sachs said, “Korean semiconductor stocks are at around a 5x forward P/E, and we are confident this cycle will last longer than in the past.” It added, “Even excluding Samsung Electronics and SK hynix, the 2026 earnings growth forecast for the remaining companies has risen from 20% in January this year to 57% now,” and “Korea is posting overwhelmingly strong results in Asia.”

Samsung Securities also late last month lifted the upper end of this year’s KOSPI band from 8,400 to 11,000.

Even with many positive outlooks in the market, semiconductor-related sectors such as Samsung Electronics and SK hynix have already risen significantly, and the added volatility makes investors hesitate.

Experts nonetheless agreed that this is not the time to raise allocations to safe assets. The steep run-up is a burden, but semiconductor growth continues and abundant liquidity is providing support.

Yoon Jong-yeon, PB team head at the Hana Bank Club1 Dogok PB Center branch, said, “As a rule, when interest rates are raised, it makes more sense to choose deposits over stocks, but today’s market is being driven by expectations for the performance of chipmakers like Samsung Electronics and SK hynix rather than external economic conditions. If earnings decline or hyperscalers (large-scale cloud providers) cancel long-term contracts, exposure should be cut significantly, but that is not the case now.”

Since funds are ultimately concentrating in AI-related names such as semiconductors, robots, and cloud, there was also advice to pursue index-linked investing.

Park Yang-seo, PB team head at the Shinhan Premier PWM Gangnam Finance Center, said, “If Nvidia CEO Jensen Huang visits Korea, funds will likely flow to Naver (cloud) and to LG and Hyundai Motor (humanoids). In the end, right now it has to be AI, and since money is circulating within that space, index-linked investing is also fine.”

There was also the view that investors should understand the AI-related ‘value chain’ and invest accordingly, while guarding against taking out loans to invest due to FOMO (fear of missing out).

According to the Korea Financial Investment Association, the outstanding balance of credit lending, a gauge of ‘debt-fueled investing,’ reached 37.6812 trillion won as of the 1st. When you borrow to invest and share prices fall, you may be forced to sell even if you want to hold, causing losses to snowball.

Shin Yoon-a, a director at the Woori Investment & Securities Gangnam Finance Center, emphasized, “For investors who have just entered the market, it is dangerous if they do not consider the possibility of a decline.”