- Japan's Nomura Securities raised its target prices for SK Hynix and Samsung Electronics.
- The brokerage has a “buy” rating on both companies.
- SK Hynix’s stock may touch 4 million won while Samsung Electronics could reach 590,000 wo
Even as US semiconductor stocks recorded a sharp fall, Japan's Nomura Securities raised its target prices for SK Hynix and Samsung Electronics.
The brokerage has a “buy” rating on both companies and estimates that SK Hynix's stock may touch 4 million won while Samsung Electronics could reach 590,000 won over the next 12 months.
The move by the global brokerage came after the Philadelphia Semiconductor Index dropped more than 4%, on May 15 amid fears of continued high oil prices and a spike in interest rates. Nomura, in its recent report, maintained that the structural growth potential of the artificial intelligence (AI) memory industry is still intact, Chosun Biz reported.
Nomura stated that Samsung could rally over 110% this year, based on Monday's closing prices. It predicted a jump of about 117% on SK Hynix.
Why Is Nomura Bullish About Samsung And SK Hynix?
South Korea's chip stocks have been recording historic highs. The Kospi index rallied 78% so far this year, with SK Hynix and Samsung Electronics leading the gains.
Nomura believes that the AI memory industry has been in a “structural growth phase” since ChatGPT's launch in December 2022, which led to a surge in the demand for high-bandwidth memory (HBM) chips for use in AI and high-performance computing applications.
Samsung and SK Hynix are among the largest producers of HBM chips, CNBC reported. SK Hynix, the top player in the segment is expected to lead in the production of the advanced HBM4 chips as well.
Nomura has projected that the rise of agentic AI will lead to a substantial increase in memory demand. As artificial intelligence utilises large amounts of KV (Key Value) cache memory to store and use values, demand for AI memory, including high HBM, is bound to jump. The brokerage predicted that while the pace of supply growth will be limited to about 30% annually, memory demand could rise by thousands of times over the next five years.
“Against this structural backdrop, we believe memory vendors have entered an unprecedented phase of rapid revenue growth and margin expansion in a short period of time,” Nomura wrote.
It predicted that global data center capital expenditures (CAPEX) will rise to somewhere between $5 trillion and $6 trillion in 2030 from $1.16 trillion in 2025.
Early results from SK Hynix and Samsung highlight the trends predicted by Nomura. SK Hynix's operating profit rose fivefold year-on-year in Q1 2026. Samsung's operating profit surged over 750% in the same period.
