IBM's stock price plummeting 25% in a single day is not viewed as bad news by Goldman Sachs, but rather as the most powerful real-world evidence for a storage super-cycle.

According to the latest frontline commentary from Goldman Sachs' Seoul team on July 15th, the root cause of IBM's earnings collapse lies in corporate clients massively shifting capital expenditure towards server, storage, and memory procurement to lock in supply-constrained infrastructure ahead of anticipated price hikes. This "crowding-out effect" is spreading from the AI capital expenditures of hyperscale cloud providers to ordinary enterprise IT buyers, thereby confirming the breadth and depth of the storage shortage in the real economy.

Simultaneously, after experiencing severe volatility, the Korean stock market's key technical support levels remain intact. The Seoul team notes that the KOSPI index found support from net buying by both local and foreign institutions at the 61.8% Fibonacci retracement level. While retail investors have capitulated and sold off, institutional investors widely believe that, constrained by structural shortages in equipment and components, the actual scale of industry capacity expansion will fall far short of the upper limits feared by the market. Goldman Sachs maintains its KOSPI target of 12,000 points, with a clearly bullish stance.

IBM's 25% Plunge: Crowding-Out Effect Spreads to Enterprise IT, Validating Storage Pricing Power

IBM shares plunged 25% on Tuesday, while Salesforce fell 2%. The catalyst points to the same phenomenon: corporate clients are shifting capital expenditure on a large scale from software and services to server, storage, and memory purchases to secure tight infrastructure early and hedge against expected price increases. IBM management admitted it failed to anticipate the scale of this capital expenditure re-prioritization.

Goldman Sachs believes the significance of this event extends far beyond IBM itself. The core bullish thesis for the storage super-cycle is that the wafer consumption intensity of HBM (High Bandwidth Memory) is crowding out supply for traditional server DRAM, tightening the entire DRAM market rather than just the HBM segment. IBM's latest statement provides direct confirmation that this "crowding-out effect" is now impacting non-AI enterprise customers in the real economy.

This reinforces Goldman Sachs' prior view that storage suppliers' pricing power is strengthening. Structural supply constraints and impending price increases are expected to drive a re-rating of memory chipmaker valuations. The narrative of a "higher for longer" storage cycle has gained a new anchor point of support from the enterprise side.

KOSPI Technical Support Holds: Institutions Buy on Dips, Retail Capitulates

The KOSPI recently underwent a sharp correction, plummeting 9% in a single day on Monday. Goldman Sachs points out that this decline was significantly amplified, primarily due to newly listed single-stock leveraged ETFs experiencing rapid deleveraging, triggering a self-reinforcing chain of liquidations that became disconnected from fundamental drivers.

However, at the 61.8% Fibonacci retracement level, both local and foreign institutions turned to net buying, while retail investors continued to capitulate and sell. Goldman Sachs observed this divergence in its weekly prime brokerage data and feedback from clients during its Singapore roadshow.

Concurrently, most technology investors contacted by Goldman Sachs hold a cautiously optimistic view on the pace of capacity expansion, generally believing that actual expansion efforts may be far less aggressive than market fears due to structural shortages in equipment and components.

According to media reports, ASML is expected to raise its sales guidance, and the market will closely watch whether the company can effectively expand capacity amid surging equipment demand.

Overall, Goldman Sachs identifies four positive shifts in the current market structure: First, stock prices have become cheaper during the seasonally weak third quarter. Second, retail capitulation has led to a cleaner ownership structure. Third, enterprise IT demand is stronger than expected. Fourth, both foreign and local institutions have turned to net buying at key technical support levels.

Goldman Sachs maintains its KOSPI target of 12,000 points, with an overall bullish stance.