[Click eStock] "Samsung SDS Benefits from Increased Adoption of Generative AI"

Yuanta Securities forecasted on the 26th that Samsung SDS's GPU service sales will increase in the second quarter of this year due to the growing demand for generative artificial intelligence (AI) services.

Samsung SDS recorded sales of 3.2473 trillion KRW and an operating profit of 225.9 billion KRW in the first quarter of this year. While sales decreased by 4.5% compared to the same period last year, operating profit increased by 16.2%.

Researcher Lee Chang-young of Yuanta Securities explained, "Operating profit exceeded market expectations," adding, "Despite the off-season in the system integration (SI) market in the first quarter, cloud sales increased by 29.5% year-on-year." He further noted, "The improvement in operating profit margin was due to an increase in profitable cloud sales and one-time logistics gains."

Lee analyzed, "Demand for generative AI services is increasing," and "Cloud management service (MSP) demand has grown mainly in sectors where security is critical, such as public and financial industries." He predicted, "The IT services sector, including the recently launched enterprise AI platform 'Paeburiks' (Fabricx), will continue to grow externally centered on the cloud," but added, "Due to increased investment in AI platform and service construction, profit margin improvement will be limited."

He emphasized, "Improving corporate productivity through the adoption of generative AI is becoming a necessity rather than a choice," and stated, "Based on experience in corporate SI construction, increased AI infrastructure demand within the Samsung Group, and cloud service experience, Samsung SDS will benefit as the generative AI market grows."