Goldman Sachs has raised its target for emerging markets stocks, predicting that the artificial intelligence-driven rally in Chinese equities will generate positive momentum across global markets. Investors looking for opportunities beyond China could benefit from this broader uptrend.
The firm has lifted its 12-month target for the MSCI Emerging Markets Index by 3%, now expecting it to reach 1,220 from a prior forecast of 1,190. This adjustment signals an 11% potential upside from current levels, underscoring the impact of AI adoption on valuations through earnings growth, increased multiples, and rising portfolio flows.
Goldman Sachs believes the rally in China could spill over into other emerging markets, particularly those with strong historical correlations to Chinese equities that have yet to catch up. The resurgence in China’s stock market may gain further traction as fiscal stimulus measures, unveiled at the highly anticipated “Two Sessions” meeting, bolster economic growth and market confidence.
As AI-driven expansion continues to shape investment landscapes, emerging markets could see a renewed wave of capital inflows, presenting significant opportunities for forward-thinking investors.
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.
