Samsung and Hynix Target Prices Imply 65% and 74% Upside Respectively

Morgan Stanley maintains 'attractive' rating on Korea tech, citing ended memory correction. Targets imply 65-74% upside, driven by AI demand and long-term contracts.

Woofun AI reports that Morgan Stanley maintained its 'attractive' rating for South Korea's technology sector in an August 6 report, describing the recent memory industry correction as a 'minor wrinkle.' The firm kept target prices unchanged at 381,000 won for Samsung Electronics and 2.6 million won for SK Hynix, implying approximately 65% and 74% upside potential respectively.

The bank raised its 2027 cloud capital expenditure growth forecast from 14% to 29%, citing strong AI demand and insufficient hash rate capacity among cloud providers. While acknowledging potential DRAM price slowdowns and rising inventories in the fourth quarter, Morgan Stanley emphasized that long-term supply agreements will be key to reevaluating valuations. Samsung plans to cover 60%-70% of production under such contracts, while SK Hynix has negotiated with about 10 customers. The firm favors DRAM and NAND SLC due to demand constraints but remains cautious toward memory module manufacturers.