Goldman Sachs said on June 3 that gains in Asian AI chipmaker stocks could continue, but the risk of a pullback is rising as the rally narrows and speculative activity increases.

The investment bank raised Taiwan to overweight, increased its target price for South Korean shares, cut Hong Kong-listed H-shares to market weight, and kept mainland-listed A-shares at overweight.

Goldman said North Asia offers the region’s strongest earnings growth, supported by greater exposure to technology stocks.

It added that stocks delivering earnings growth, or revenue growth in earlier-stage industries, are being rewarded, while those falling short are being punished or ignored.

Goldman said the MSCI Asia Pacific ex-Japan index is up 27% year to date, but down 4% excluding South Korea and Taiwan.

The gap reflects differences in exposure to the technology sector and vulnerability to energy supply shocks.

North Asia has larger buffers against the Iran war energy shock and is the center of the AI trade, while South Asia is more exposed to higher energy prices and has few listed AI companies.

🔗 Source: Reuters

Recent Goldman Sachs developments