"Samsung Electronics Falls Below 300,000 Won, But Nothing Has Changed" Brokerage Sees Stock as a Buy, With a 600,000-Won Target

[Financial News] Despite Samsung Electronics' sharp stock volatility, brokers said its core fundamentals remain unchanged, making it a potential buying opportunity from a medium- to long-term perspective.

In a report released on the 15th, KB Securities said, "Samsung Electronics' stock has recently fallen 30% from its previous peak as concerns over a slowdown in AI investment were reflected in the price. However, the industry's core fundamentals — the long-term growth of the AI infrastructure sector and a shortage of memory supply — have not changed from a month ago."
The firm said the growth outlook tied to expanding investment in AI infrastructure remains valid. On the 13th, KB Securities had reiterated a "buy" rating on Samsung Electronics and set a target price of 600,000 won.
Samsung Electronics shares hit a peak of 362,500 won on the 18th of last month, but the stock then plunged in the latest selloff. By the close on the 13th, it had fallen 29.8% from that high to 254,500 won. However, after rebounding 3.34% to 263,000 won on the 14th, the stock was trading at 278,500 won as of 11:05 a.m. on the day of the report, up 5.89% from the previous session's close.
Kim Dong-won, an analyst at KB Securities, said, "The recent stock correction appears to reflect weakening investor sentiment more than changes in earnings or the structure of the memory industry." He added, "This adjustment is not a sign of damaged fundamentals, but rather a price correction driven by excessive market concern, and it is likely to present a buying opportunity from a medium- to long-term perspective."

He also forecast that 2027 will be the tightest year for supply in the 70-year history of the memory semiconductor industry, adding that "the supply shortage is likely to continue at least through 2028." In particular, he said aggressive investment centered on high-bandwidth memory (HBM) will structurally constrain production capacity for general-purpose DRAM.
Kim said, "HBM's share of global DRAM wafer production is expected to more than double from 15% this year to 34% next year, which means most new production capacity is being concentrated in HBM." He added, "As a result, the memory shortage felt by general customers is expected to deepen beyond a simple supply squeeze into something closer to a 'supply cliff.'"
He also noted that the Federal Energy Regulatory Commission (FERC) recently streamlined the grid connection process, which had been the biggest bottleneck in building AI data centers, through a fast-track system. As a result, the time needed for grid connections, which previously took more than five years, is expected to be shortened to around one to two years.
Kim explained that this would allow U.S. big tech companies to speed up their power procurement schedules by investing in their own generation facilities as well. He added, "The pace of AI data center construction could also become more than twice as fast as before."
bng@fnnews.com Kim Hee-sun Reporter