KB Securities raised its target price for Samsung Electronics stocks from 550,000 won to 600,000 won on July 8, citing prolonged memory supply shortages driven by expanding global AI investment. Analyst Kim Dong-won upgraded the firm's operating profit estimates for Samsung Electronics to 381 trillion won this year and 574 trillion won next year, reflecting upward revisions to DRAM and NAND price increase forecasts. The brokerage attributed the supply constraints to AI infrastructure spending projected to grow from $800 billion this year to $1.1 trillion next year and $1.5 trillion by 2028, while memory production capacity increases remain limited at 7% for DRAM and 4% for NAND next year against demand growth of 17% and 19% respectively.
KB Securities Raises Samsung Electronics Target Price to 600,000 Won
KB Securities maintained its 'buy' rating on Samsung Electronics stocks while raising the target price from 550,000 won to 600,000 won. Kim Dong-won, head of the research division, stated that "the company's earnings surprise is just the beginning" due to anticipated long-term memory supply shortages driven by global AI investment expansion. The analyst upgraded Q3 DRAM and NAND price increase forecasts to 22% and 25% respectively, and revised annual price increase estimates to 312% for DRAM and 286% for NAND. These adjustments led to upward revisions of operating profit estimates to 381 trillion won for this year and 574 trillion won for next year.
Samsung Electronics Q2 Operating Profit Reaches 89.4 Trillion Won
Samsung Electronics' Q2 operating profit reached 89.4 trillion won, representing a 19-fold year-over-year increase despite full recognition of first-half performance bonus provisions, exceeding market forecasts. Kim noted that excluding performance bonus provisions, the adjusted Q2 operating profit is estimated at 107 trillion won, constituting "a de facto earnings surprise." The analyst characterized the Q2 results as surpassing market expectations even after accounting for compensation-related charges.
Analyst Forecasts 234 Trillion Won H2 Operating Profit Amid Supply Shortage
KB Securities projects Samsung Electronics' H2 operating profit at 234 trillion won, representing a 627% year-over-year increase, with Q3 at 110 trillion won and Q4 at 124 trillion won. Kim stated that "earnings surprises are expected" in the second half, adding that "memory supply and demand dynamics show extremely limited supply growth through H1 2028, while AI memory demand is rapidly expanding across all sectors due to agentic AI proliferation, leading to intensified memory procurement competition starting in H2." The analyst noted that next year's DRAM and NAND wafer production capacity will increase by only 7% and 4% year-over-year respectively, while demand growth rates are projected at 17% and 19%, intensifying supply shortages next year.
AI Demand Projected to Drive 150x Memory Semiconductor Growth
KB Securities dismissed concerns about an AI investment peak as "excessive worry," projecting that memory semiconductor demand will grow 150-fold due to AI application diversification. Kim stated that "AI agent proliferation is expected to expand memory demand by 3x, autonomous driving by 5x, and robotics by more than 10x." The analyst characterized AI as "the fourth technological revolution following railroads, automobiles, and the internet over the past 200 years" and projected it will "ultimately become the technology standard," describing recent AI concerns as "mere noise." Global AI investment is projected to expand from $800 billion this year to $1.1 trillion next year and $1.5 trillion by 2028.
Stock Price Catalysts Include Shareholder Returns and HBM Pricing
KB Securities anticipates significant upside potential for Samsung Electronics stocks in H2, citing multiple catalysts. Kim listed "materialization of large-scale shareholder return policies such as treasury stock cancellation and special dividends, commencement of treasury stock purchases for performance bonus compensation purposes, and expectations for next year's high-bandwidth memory (HBM) price negotiations at double this year's levels." Additional factors include "expanded possibilities for new foundry orders from big tech companies including Anthropic, Google, Amazon, and Meta, as well as consideration of American Depositary Receipt (ADR) listing as part of capital policy." Lee Jae-yong, chairman of Samsung Electronics, departed for Seattle on July 7.
FAQ
What target price did KB Securities set for Samsung Electronics stocks on July 8?
KB Securities raised its target price for Samsung Electronics stocks from 550,000 won to 600,000 won on July 8, maintaining a 'buy' rating.
What operating profit does KB Securities forecast for Samsung Electronics this year and next year?
KB Securities projects Samsung Electronics' operating profit at 381 trillion won this year and 574 trillion won next year, with H2 operating profit forecast at 234 trillion won representing a 627% year-over-year increase.
How much is global AI investment projected to grow according to KB Securities?
KB Securities projects global AI investment will expand from $800 billion this year to $1.1 trillion next year and $1.5 trillion by 2028, driving memory semiconductor demand growth of 150-fold due to AI application diversification.
