Key Takeaways:
Goldman Sachs raised price targets on Samsung Electronics and SK Hynix by 53% to 60% and upgraded Kioxia to Buy, citing memory shortages extending through 2028.
"Most memory stocks are still trading at mid-single-digit P/E multiples, as if the market believes this is just another ordinary cyclical rebound," Goldman Sachs said in a report. "We disagree."
The broker lifted Samsung's 12-month target to 480,000 won and raised SK Hynix's to 3.5 million won, shifting its valuation methodology for the latter to a price-to-earnings approach at 9 times. Kioxia received an upgrade to Buy from Hold with a new target of 93,000 yen, equivalent to 7.8 times earnings for the fiscal year ending March 2028. Goldman raised its operating profit forecasts for Kioxia for fiscal 2027 through 2029 by 16% to 48% and expects gross margins to hold near 80%.
The call rests on three structural differences from prior cycles: higher demand visibility from AI server expansion and agentic AI development, constrained supply growth from slower capacity expansion and higher HBM conversion ratios, and more binding long-term supply agreements. Goldman now expects DRAM, NAND and HBM to remain in undersupply through 2028, with its 2027 DRAM supply-demand forecast revised to negative 5.9% from negative 2.5%. It raised its HBM total addressable market estimate for 2027 by 54% to $116 billion, with forecasts of $56 billion for 2026 and $168 billion for 2028.
Samsung shares surged as much as 9.6% on June 1 to a record high of 347,500 won, extending its year-to-date gain to 189%, after the company posted a sevenfold increase in first-quarter operating profit to 57.2 trillion won. Goldman now expects Samsung's operating profit to reach 374 trillion won in 2026, 530 trillion won in 2027 and 610 trillion won in 2028. For SK Hynix, it projects 271 trillion won, 401 trillion won and 454 trillion won over the same period.
The upgrade signals Goldman's conviction that memory has transitioned from a cyclical commodity to predictable AI infrastructure, warranting a structural re-rating. Investors will watch for HBM pricing trends and capacity announcements from Samsung and SK Hynix in the second half of 2026 as the key test of this thesis.
This article is for informational purposes only and does not constitute investment advice.
