Goldman Sachs raises emerging-markets target on AI-driven earnings growth

Goldman Sachs is pushing a narrower message on AI for emerging markets: the trade is not just about semiconductors in the U.S., but about where earnings power is actually showing up across North Asia. The bank raised its 12-month target for the MSCI Emerging Markets Index to 2,000 from 1,850, implying nearly 12% upside from the index’s last close of 1,787.88, and said AI-driven earnings growth was the reason.

The emphasis fell on North Asia, especially South Korea and Taiwan, where Goldman said AI-related chip demand and memory supply constraints have pushed some large semiconductor names to extreme valuations. For Goldman employees covering clients, the message is clear: the firm wants the AI conversation to start with regional earnings, not with a broad tech slogan. That changes how strategists frame the trade, how sales teams pitch it, and how macro desks talk through where money may rotate next.

Goldman’s own research has been leaning that way for months. Goldman Sachs Research said emerging-market company earnings were expected to rise 14% in 2026, with technology leading the region, and said South Korea, Taiwan and China offered the most direct exposure to the AI theme. In a separate Asia discussion in May, Goldman said North Asian markets were pulling ahead on the strength of the artificial intelligence trade while remaining more insulated from the Middle East energy shock.

That regional split showed up again in the bank’s more tactical calls. Reuters reported earlier in June that Goldman upgraded Taiwan and South Korea, with analysts saying gains for AI chipmaker stocks could continue even as pullback risks grew. The same note lifted Goldman’s 12-month Kospi target to 12,000 from 9,000 and its Taiwan Taiex target to 51,000. Timothy Moe, Goldman’s chief Asia-Pacific equity strategist and co-head of macro research, was identified on the note, underscoring how closely the bank is tying stock selection to macro positioning.

Goldman also folded geopolitics into the same framework. It said a quick resolution to the Iran conflict could support the South African rand, Korean won, Polish zloty and Chilean peso, while local-currency bonds could also get relief. That view has market precedent: in April, South Africa’s rand, government bonds and stocks rallied when ceasefire hopes improved risk appetite after the currency had fallen more than 5% against the dollar during the conflict.

For Goldman’s front office, the takeaway is practical. The firm is asking staff to separate true AI beneficiaries from the rest of the emerging-markets backdrop, then connect that call to currencies, bonds and client flows. In a year when bonus pools, pitch books and coverage priorities all compete for attention, the desks that can explain that link cleanly are the ones most likely to matter.