Morgan Stanley said the sharp correction in recently slumping memory-chip stocks appears to be over and called the current price levels an attractive reentry zone.
According to the financial investment industry on the 9th, Morgan Stanley said in its Asia technology report "Memory—small kink," published on the 6th, "What appears to be the steepest correction so far in the memory industry seems to be over," adding, "Valuations offer attractive tactical reentry opportunities."
Morgan Stanley assessed the recent pullback in memory stocks as a temporary kink that emerged as the business cycle moves into a mature phase.
It kept a positive outlook on artificial intelligence (AI) capital spending and shareholder returns. It also identified aggressive shareholder returns, including share buybacks, as the key catalysts to drive a rebound in share prices.
Morgan Stanley maintained its price targets for SK hynix and Samsung Electronics at 2.6 million won and 375,000 won, respectively. It raised SK hynix's forecast for earnings per share (EPS) in fiscal 2026 by 13% from before, but lowered Samsung Electronics' by 10%.
However, it noted that from the fourth quarter of this year, slower gains in memory prices and rising inventories and supply could reduce the room for further upward revisions to earnings forecasts.