Goldman Sachs on Thursday raised its outlook for Asian equities, projecting a 26 per cent USD price return over the next 12 months for the MSCI AC Asia Pacific ex-Japan (MXAPJ) index, with a 12-month target of 1,120, driven overwhelmingly by a technology-led earnings boom.
In its Global Strategy Paper No. 78, the bank forecast regional earnings growth of 75 per cent in 2026, followed by 25 per cent in 2027 and 14 per cent in 2028 — a sharp recovery after 15 years of sub-par profit delivery between 2011 and 2025. Over a 10-year horizon, Goldman raised its annual earnings growth forecast for the MXAPJ index to 10 per cent, up one percentage point from its previous estimate of 9 per cent.
The information technology sector sits at the centre of this outlook. Goldman estimates it will account for 47 per cent of full-year 2026 regional earnings, with memory chips alone comprising roughly 70 per cent of that profit pool. The bank projects the info tech sector to compound at a 20 per cent annual rate from 2027 to 2031, underpinned by AI-driven hyperscaler capital expenditure, which it expects to exceed $6 trillion between 2026 and 2030.
On supply dynamics, Goldman’s analysts flagged record undersupply in both DRAM and NAND memory in 2026, with the shortfall projected to persist potentially through 2030. Long-term supply agreements covering 50-70 per cent of planned production capacity are expected to sustain pricing power and manufacturer margins.
The bank maintained overweight positions on Korea, Taiwan, Japan, and China A-shares — markets with the heaviest technology exposure — while underweighting Australia, Thailand, Indonesia, and the Philippines. Korea’s KOSPI carries a 12-month target of 12,000, implying 71 per cent upside from current levels.
Goldman also flagged concentration risk, noting that the top six technology stocks account for 36 per cent of the MXAPJ index. To offset this, the bank recommended selective diversification into themes including power infrastructure, aerospace and defence, and high-dividend yielding stocks.
The 10-year annualised USD total return forecast stands at 13.6 per cent, placing it at the 89th percentile of historical outcomes.