[Click eStock] "Samsung Electronics, Expected to Intensify AI Server Market Push in Second Half"

On the 18th, BNK Investment & Securities predicted that if Samsung Electronics' full-scale entry into the AI server market in the second half of the year materializes, it could join the global AI stock rally. The firm maintained its 'Buy' rating and target price of 86,000 KRW.

Samsung Electronics Seocho Building, Seocho-gu, Seoul. Photo by Jinhyung Kang aymsdream@

Minhee Lee, a researcher at BNK Investment & Securities, raised Samsung Electronics' Q1 sales and operating profit forecasts by 4% and 7% respectively from previous estimates, to 72.6 trillion KRW and 5 trillion KRW.

He analyzed, "The average selling prices of DRAM and NAND in Q1 this year are expected to exceed the previous quarter by 11% and 10%, respectively. However, losses are expected to continue due to decreased sales and increased costs in the System LSI division, partially offsetting memory profits." He added, "Thanks to increased sales of the Galaxy S24, smartphone revenue is expected to grow. However, margins are likely to decline slightly year-on-year due to rising component prices."

Regarding why this year's stock price has lagged behind its peer group, the researcher explained, "It is because of limited direct benefits from AI and ongoing uncertainties in mobile and general server demand." Nevertheless, he added, "Since bottoming out early last year, earnings have improved each quarter. We expect the stock price to gradually rise over the long term, setting higher lows."