Goldman Sachs sees AI and energy split driving North‑South Asian

North Asian equities are outpacing their southern peers, with South Korea up more than 80% YTD while Indonesia falls about 25%, as Goldman Sachs points to stronger energy buffers and AI‑related semiconductor demand as the key drivers【3】.

AI and energy resilience shape the regional divide

Goldman’s Tim Moe explained that North Asian markets—particularly South Korea, Taiwan and Japan—benefit from “greater buffer stocks” and fiscal capacity to absorb higher oil and gas prices, unlike South Asian economies that lack such cushions【3】. This energy resilience, combined with a surge in AI‑related semiconductor spending, is fueling a “massive outperformance” in the north. Hyperscalers are committing roughly $755 billion to capital expenditures this year, a 38% year‑over‑year increase, which underpins semiconductor earnings and keeps AI stocks in demand【1】.

Market reactions and valuation cautions

The north‑south split is already reflected in equity targets: Goldman raised its 12‑month KOSPI forecast to 9,000 from 8,000, citing potential 300% earnings growth—its strongest outlook for any Asian market aside from the 1999 post‑crisis rebound【2】. Yet Moe warned that Korean semiconductor giants such as Samsung Electronics and SK Hynix trade at roughly five‑ to six‑times this year’s earnings and four‑times next year’s, suggesting market skepticism about the durability of current profit levels【3】.

Regional nuances beyond the headline numbers

In China, A‑shares have risen about 10% YTD, outperforming H‑shares, which lag due to weaker earnings in internet‑application firms and a heavier exposure to the softer end of the AI trade【3】. Meanwhile, Taiwan’s index is roughly 80% tech‑oriented, South Korea’s about 60%, and Japan’s 30%, explaining why the AI boom lifts those markets more than others【3】.

What to watch

• Upcoming Asian central‑bank meetings (e.g., Bank of Korea, Bank of Japan) for policy shifts that could affect energy‑price pass‑through.
• Quarterly earnings of Korean semiconductor firms; a miss could test the high valuation multiples noted by Moe.
• Any significant change in global oil prices, which would test the “energy buffer” advantage of North Asian economies.

The split highlights how AI‑driven semiconductor demand and energy‑price resilience are redefining investment focus across Asia, but the sustainability of the north’s rally hinges on earnings durability and the trajectory of global energy markets.