There is no end in sight for the AI craze. Memory factories are seeing huge profits and stock prices are soaring. The well-known investment bank Morgan Stanley recently issued a report, raising the target price of Samsung Electronics to 144,000 won. If the bull market continues, it is even expected to challenge 175,000 won.
Korean media "BusinessKorea" reported that Morgan Stanley issued a report on the 10th saying that as DRAM shortages drive prices up, Samsung, as a major DRAM manufacturer, is expected to continue to grow in profits. Solid fundamentals will support the stock price rise. The future prospects are quite bright. It is optimistic about the follow-up business performance, and the stock price must be high.
The report specifically mentions that the long-term growth momentum of AI is stable, and the demand for related infrastructure and applications is expanding rapidly, which has pushed up memory quotations. Taking the spot price of 16Gb DDR5 as an example, the price in September was US$7.5, and it has recently soared to US$20.9, an increase of 336%.
Morgan Stanley is optimistic that thanks to the continued demand for AI infrastructure and ultra-large-scale cloud providers, DRAM prices are expected to exceed the high point of the semiconductor super boom period in 2018. Morgan Stanley used to be pessimistic about the memory industry, but now it has admitted its mistake and corrected its stance. It bluntly stated that memory has entered a super cycle, and stock prices and profits are expected to rise simultaneously.
In September last year, Morgan Stanley's Seoul branch issued a bearish research report on SK Hynix, calling out that "winter is coming" in the memory market. The target price was slashed from 260,000 won to 120,000 won, and the rating was downgraded by two levels to "underweight," causing SK Hynix's share price to plummet by more than 6%.
On November 11, Samsung Electronics’ stock price rose 2.88% to close at 103,500 won. There is still 39.1% room for growth from Morgan Stanley’s target price of 144,000 won. It has risen by 94.55% this year.