Goldman Sachs has raised its 12-month
target for MSCI emerging markets index, citing
AI-driven earnings growth, and said a quick resolution to the
Iran conflict could boost some currencies and offer relief to
bond markets.
The brokerage raised its benchmark index target to 2,000
from 1,850, implying a nearly 12% upside from its last close of
1,787.88.
Equities across emerging markets have been on a rally, led
by AI-driven North Asian markets such as South Korea and Taiwan,
with the benchmark index up 9% in May, outperforming a 5% climb
in the S&P 500.
“We think this earnings-driven rally can extend given a
longer memory upcycle, leading to further increases in our
earnings expectations and index targets in Korea and Taiwan,”
Goldman said in a note on Wednesday.
South Korean heavyweights SK Hynix and Samsung
Electronics each topped a $1 trillion valuation last
month, buoyed by booming demand for high-end memory chips that
has created a supply crunch and driven up prices.
Goldman now projects the index’s earnings-per-share (EPS) to
come in at 55% this year, up from a previous forecast of 45%.
For 2027, the Wall Street brokerage expects EPS growth of
20%, a notch higher than its prior forecast of 19%.
However, excluding North Asia, which roughly accounts for
half of the index weight, Goldman forecasts only 11% EPS growth
for both 2026 and 2027, reflecting the massive uptick from
AI-driven gains.
Beyond tech-heavy indexes, rate-sensitive markets such as
South Africa, Brazil and the UAE could outperform on optimism
around a potential U.S.-Iran deal, Goldman said.
In the event of a conflict resolution, South African rand
, Korean won, Polish zloty and Chilean peso
could ‘stand out’ among currencies, Goldman said, while
local currency bonds could also see a “pathway for relief”.
Published on June 4, 2026