Mixed Outlook on Micron... What About Samsung Electronics and SK hynix?

[Financial News]  

Pessimism and optimism are also divided over the stock outlook for the world's three major memory chipmakers: Samsung Electronics, SK hynix, and Micron.
A continued memory chip shortage through next year is a strong reason for further gains, but signs that companies are slowing AI spending are a negative factor.
The stock trends of these three major memory chipmakers, which account for 90% of global memory supply, appear to be at a crossroads.

According to Yahoo Finance on the 4th local time, some Wall Street analysts are focusing on three factors that could push Micron's stock even higher.
The biggest driver is the expectation that shortages of AI memory, or High Bandwidth Memory (HBM), DRAM, and NAND flash memory, will continue through next year.
The second is long-term contracts.
Micron has signed large long-term supply deals through 2030, and most of SK hynix's and Samsung Electronics' HBM output has already been sold through early next year. Unlike in the past, a cyclical slowdown in memory demand is unlikely to appear, at least in the near term.
An attractive valuation is another factor.
Although the three companies' stocks have surged, analysts say they still look undervalued relative to their future earnings outlook.
For that reason, Goldman Sachs and others have set a $2,000 price target for Micron.
Nomura Holdings, Inc. has set a target of 4 million won for SK hynix, while Bernstein has placed Samsung Electronics' target price at 670,000 won.
That suggests optimism that Micron and Samsung Electronics could more than double from current levels, while SK hynix could rise another 65%.

Still, caution is far from weak.
The Motley Fool warned on the 1st that there is no reason to buy Micron even at $1,100 per share, saying the memory cycle may soon reach its limit.
As the three memory chipmakers race to expand facilities, chip prices could collapse once supply catches up with demand.
A recent UBS survey also adds to the concern. It found that 60% of companies are cutting AI spending to reduce costs and shifting to cheaper models that require less computing power. That suggests memory demand will not keep rising indefinitely.
That would deal a direct blow to the profitability of the three major memory chipmakers, which have relied on HBM margins.

However, the fact that the three major memory chipmakers are not tied only to AI means they still have an escape route even if AI demand weakens.
In its fiscal third-quarter earnings release for fiscal 2026 on the 28th of last month, Micron said revenue from its mobile segment jumped 254%, while sales in its automotive and robotics segment surged 311%.
That points to new markets in on-device AI devices such as PCs and smartphones, as well as autonomous driving and humanoid robots. According to Micron, autonomous driving and humanoid robots use several times to dozens of times more memory than conventional devices.
It also means Samsung Electronics and SK hynix, already the dominant players in the mobile DRAM market, could reduce earnings volatility through memory for autonomous driving and robotics.
Micron closed on the 2nd at $975.56, down 5.49% from the previous session, while Samsung Electronics jumped 8.22% to 309,500 won on the 3rd and SK hynix surged 10.88% to 2,425,000 won.

dympna@fnnews.com Song Kyung-jae Reporter