Asia Drives Strong AI Spending Momentum, Goldman Sachs Sees Steep Earnings Growth

Key Findings

Goldman Sachs says Asia is having a very good AI year, with the driver being money spent on AI infrastructure such as chips, power, and data centers. The bank points to Japan, India, and China as the places where the momentum is strongest.

Numbers Behind the Optimism

Goldman now projects a 26% return in US dollar terms for the MSCI AC Asia Pacific ex-Japan index over the next 12 months. The bank's target for the index is 1,120.

Sector Focus

Much of that profit is expected to come from one sector. Goldman forecasts that IT will account for 47% of Asian regional earnings in 2026, with memory chips expected to make up about 70% of that.

Emerging Trends

Goldman expects hyperscaler AI capital expenditure to top $6 trillion between 2026 and 2030. At the same time, the bank flags a record undersupply of memory that could persist through 2030.

Regional Breakdown

Goldman maintains overweight recommendations on Korea, Taiwan, Japan, and China A-shares, citing their significant technology exposure. The firm identifies 42 AI-enabling companies listed on Indian exchanges, concentrated in power, data centers, and semiconductors.

If IT generates 47% of regional earnings and memory accounts for about 70% of that, Asia ex-Japan equities become heavily leveraged to one segment of the chip cycle. The front-loaded earnings profile also matters, with growth of 75% in 2026 decelerating to 14% by 2028.