Morgan Stanley says the plunge in memory stocks is over... Diagnosing Samsung Electronics and SK hynix as a re-entry zone

[Financial News]  An overseas investment bank has said that the recent sharp decline in memory semiconductors has largely run its course. Morgan Stanley said current share prices look like an attractive re-entry point, but it also warned that memory prices could slow their rise after the fourth quarter of this year.
According to the investment banking industry on the 9th, Morgan Stanley said in its Asia technology report, "Memory - Small Bump," published on the 6th, that "the steepest correction seen so far in the memory industry appears to be over" and that "current share prices are offering an 'attractive' tactical re-entry opportunity."
Morgan Stanley described the correction as a natural adjustment in the process of the memory cycle maturing. It also said share buybacks and other shareholder return policy measures by companies could become a key catalyst for stock gains.

Still, the report was not entirely optimistic. It said the pace of memory price increases is likely to slow from the fourth quarter of this year, and that further upside to earnings estimates may be limited as inventories and supply rise. At the same time, it maintained a positive view on expanded investment in Artificial Intelligence (AI) and shareholder return policy.
By stock, it kept its target prices for SK hynix and Samsung Electronics at 2.6 million won and 375,000 won, respectively. Its earnings outlook for fiscal 2026 was mixed. It raised its Earnings per share (EPS) forecast for SK hynix by 13% from the previous estimate, while cutting Samsung Electronics' forecast by 10%.
Shawn Kim, the Morgan Stanley analyst who wrote the report, is the person who first warned of a slowdown in the memory industry in a 2021 report titled "Winter Is Coming."
Morgan Stanley also raised the possibility of a short-term correction in early last month, saying DRAM prices were nearing a peak and investors' exposure to memory stocks and leverage had become excessive. Since then, memory semiconductor stocks have indeed undergone a sharp correction, drawing market attention.
[email protected] Seo Yoon-kyung Reporter