KB Securities maintained a "Buy" investment rating on Samsung Electronics and raised its target price to 450,000 won from 360,000 won. It said a shortage of memory supply will deepen next year, and that despite recent concerns about a union strike, the strength of earnings improvement is increasing.
KB Securities revised up its operating profit estimates for Samsung Electronics for this year and next year to 374 trillion won and 497 trillion won, respectively. That is because second-quarter memory price gains are exceeding expectations, and prices for DRAM and NAND this year are forecast to surge 297% and 256%, respectively, from a year earlier.
Kim Dong-Won, head of research at KB Securities, said, "From 2026, the artificial intelligence (AI) market is expected to expand rapidly to AI 2.0, namely agentic AI," adding, "Accordingly, AI infrastructure will spread beyond cloud-centered AI servers to On-device AI and physical AI, forming a much broader growth path."
Samsung Electronics' second-quarter operating profit is expected to jump 19-fold from a year earlier to 90 trillion won. That would be up 58% from the first quarter. The operating margin is expected to be 51%. In particular, it projected that second-quarter memory prices will clearly show a trend of exceeding market expectations.
Kim said, "In the first quarter, AI token usage increased 50% to 60% quarter over quarter," adding, "Converted, that implies a threefold increase in six months and a sevenfold increase on a one-year basis, making it even more urgent for cloud companies to secure memory capacity." She also explained that considering U.S. big tech companies' 2027 AI demand outlook and capital expenditures, next year's memory supply will be tighter than this year.
In the end, memory semiconductors are expected to be revalued as a scarce strategic asset. Capital expenditures by the four big tech companies, including Alphabet and Amazon, in 2026 are expected to exceed $725 billion (about 1,082 trillion won), up 77% from a year earlier, and in 2027 to exceed $1 trillion (about 1,493 trillion won).
Kim said, "From a big tech perspective, AI investment is no longer a simple capacity expansion race," adding, "It is a race to preempt AI infrastructure that can change the global economic landscape and industrial leadership, and it is key to determining future platform dominance." She explained that AI investment is likely to continue until sufficient memory capacity and data center infrastructure are secured.
Accordingly, big tech's AI capital expenditures are being recognized not as an expense but as a barrier to entry for survival. Kim emphasized, "In the AI infrastructure structure, memory semiconductors will be revalued as a scarce strategic asset that goes beyond simple components and determines the performance and scalability of the entire AI system."
Over the past month, Samsung Electronics' share price lagged at about half the 74% average gain of competitors, reflecting concerns about a union strike. Kim added, "The strength of earnings improvement is actually increasing, so the share price pullback appears to be an opportunity to increase exposure."