"Samsung Electronics to Reach 600,000 Won"...Target Price Raised Despite Sharp Stock Decline

[Financial News] Expectations for an improvement in the memory semiconductor industry have risen, and Samsung Electronics' target price has been raised once again.
On the 8th, KB Securities raised its target price for Samsung Electronics from 550,000 won to 600,000 won, saying that a memory supply shortage driven by expanding global artificial intelligence (AI) investment is likely to last until 2028.
Kim Dong-won, head of research at KB Securities, maintained a "buy" rating on Samsung Electronics and predicted that "global AI investment will expand from $800 billion this year to $1.1 trillion next year and $1.5 trillion in 2028, prolonging the shortage of memory semiconductors."
As a result, KB Securities raised its forecasts for DRAM and NAND flash memory price increases in 2026 to 312% and 286%, respectively, and also lifted its operating profit estimates for this year and next year to 38.1 trillion won and 57.4 trillion won. It expects supply shortages to deepen further in 2027, as DRAM and NAND wafer capacity growth will reach only 7% and 4%, while demand is projected to rise 17% and 19%, respectively.
The brokerage also gave a positive assessment of second-quarter results. Kim said that Samsung Electronics' second-quarter operating profit came in at 8.94 trillion won, beating market expectations even after reflecting performance bonus provisions, and that adjusted operating profit excluding the bonuses was around 10.7 trillion won, amounting to what was effectively an earnings surprise.
He added that operating profit in the second half of the year would also reach 23.4 trillion won, up 627% from a year earlier, with 11 trillion won in the third quarter and 12.4 trillion won in the fourth quarter.
Kim particularly stressed that "as demand for AI memory rapidly spreads to agentic AI, autonomous driving, and robotics, memory demand is expected to increase significantly over the long term." He also dismissed recent market concerns about a slowdown in AI investment as "nothing more than noise," saying that "excessive worries should be used as a buying opportunity."
He also cited several factors that could lift the stock in the second half of the year, including expanded shareholder returns such as treasury share cancellations and special dividends, treasury share purchases to fund performance bonuses, HBM price negotiations in 2027, the possibility of new foundry orders from global big tech, and a review of a U.S. ADR listing.
dschoi@fnnews.com Choi Du-seon Reporter