Global investment bank (IB) Morgan Stanley adjusted its target prices for Samsung Electronics and SK hynix upward, noting the long-term potential for improvement in the semiconductor industry.
Morgan Stanley ignited the semiconductor winter theory with its reports last September titled "Memory-Winter Always Laughs Last" and "Winter Looms," but it seems there has been a change in evaluation.
According to the financial investment industry on the 19th, Morgan Stanley published a report the previous night, raising the target price for Samsung Electronics from 65,000 won to 70,000 won. The target price for SK hynix was also increased from 150,000 won to 230,000 won. The previous day's closing prices for Samsung Electronics and SK hynix were 57,600 won and 203,000 won, respectively.
Morgan Stanley positively assessed that NAND flash prices are rebounding due to production cuts and that spot prices for DRAM are rising due to China's artificial intelligence (AI) equipment investments and pre-tariff purchase demand.
However, Morgan Stanley evaluated that although three quarters have passed since the semiconductor industry's downturn, it has not yet reached a point where it can be termed a "bottom." They anticipated that a V-shaped recovery, like in the past, will also be difficult. Corporations are reluctant to provide guidance regarding memory semiconductor purchases, and consumer sentiment has worsened, showing no clear signs of demand rebounding.
Nonetheless, Morgan Stanley noted, "There is no reward without risk," adding, "Since risk is volatility, to achieve significant profits, one must endure substantial losses." They continued, "The market is increasingly looking beyond the valley," expressing more hope from a long-term perspective until 2026.
Morgan Stanley identified Samsung Electronics as a more preferred stock over SK hynix. Their investment opinion suggested overweight (OW) for Samsung Electronics and equal weight (EW) for SK hynix. In this regard, they cited the logic that "there are no gains without pain."