Samsung SDS is strong early in the session on expectations for expanded artificial intelligence (AI) business in the second half and improved earnings.
As of 9:47 a.m. on the 7th, Samsung SDS is trading at 204,500 won, up 11,200 won (5.79%) from the previous session.
On this day, the securities industry raised its target price in succession, citing second-quarter earnings improvement and growth in the AI business.
Hana Securities maintained a "buy" rating on Samsung SDS and raised its target price to 240,000 won from 220,000 won. Lee Jun-ho, a Hana Securities analyst, projected second-quarter revenue of 3.6097 trillion won and operating profit of 229.6 billion won, in line with market consensus. It analyzed that the stable recovery of the IT services division and the effect of higher freight rates in the logistics division would support results.
In particular, it predicted that the Generative AI business would begin to contribute to results in earnest in the second half. The analyst said, "Compared with the first half, the second half is expected to deliver strong results," adding, "B300 GPUaaS has started, and revenue from second-half public-sector Generative AI projects will be recognized in earnest." The analyst added, "Since June, adoption of Generative AI across the group has been progressing actively, and we are responding to global LLM model demand through the Fabrics platform, so earnings growth is expected as GPU usage increases."
The AI data center (AI DC) business was also presented as a mid- to long-term growth driver. Hana Securities projected that Samsung SDS plans to secure a total of 120 MW of AI data centers by 2028 and could generate more than 2 trillion won in annual revenue through them.
Hanwha Investment & Securities also raised its target price to 250,000 won from 210,000 won. Kim So-hye, an analyst at Hanwha Investment & Securities, expected second-quarter revenue of 3.69 trillion won and operating profit of 246.7 billion won, beating market expectations. It analyzed that in the cloud division, the resumption of delayed projects and expansion of managed services (MSP) would help, and in the logistics division, higher freight rates and increased group shipment volumes would drive earnings improvement.
Kim said, "This second quarter is an inflection point where normalization of results becomes visible," and projected, "In the second half, a solid earnings trajectory will continue, backed by growth in the cloud business and expanded investment in AI data centers."