Samsung Securities maintained its 'Buy' rating and 500,000 won target price for Samsung Electronics on July 6, citing continued earnings improvement driven by strong DRAM pricing and stable AI memory demand. Analyst Lee Jong-wook raised the Q2 memory segment operating profit estimate from 80 trillion won to 84 trillion won, reflecting stronger-than-expected server DRAM prices. The upgrade follows Samsung Securities' decision to increase its server DRAM average selling price (ASP) growth forecast from 50% to 55% and incorporate improved NAND profitability. Lee stated that current investor concerns represent 'noise' rather than fundamental deterioration, positioning market worries as buying opportunities. Samsung Securities projects Samsung Electronics' full-year operating profit will reach 372 trillion won this year and 565 trillion won next year, supported by tight memory supply-demand conditions and sustained AI infrastructure buildout.
Samsung Securities Raises Q2 Memory Profit Estimate to 84 Trillion Won
Samsung Securities estimated Samsung Electronics' Q2 revenue at 182 trillion won and operating profit at 86 trillion won, aligning with market consensus of 85 trillion won. The firm raised its memory segment operating profit forecast from 80 trillion won to 84 trillion won to reflect stronger server DRAM pricing observed after June. Analyst Lee Jong-wook explained that the server DRAM ASP growth rate projection was increased from 50% to 55%, with improved NAND profitability also factored into the revised estimate. The report noted an expanded provision for semiconductor division bonuses, raising the Q2 allocation from 9.5 trillion won to 16.3 trillion won under the assumption that Q1 accruals would be recognized in Q2.
Device Experience Profitability Slowdown Continues as Foundry Narrows Losses
Samsung Securities forecast continued profitability deceleration in the Device Experience (DX) division, which includes smartphones, though the slowdown rate is expected to moderate due to higher proportions of premium products and price increases. The foundry business is projected to reduce its loss scale and increase the likelihood of achieving quarterly profitability in the second half. The firm maintained that the virtuous cycle of investment expansion, production growth, profit improvement, and shareholder returns will continue as elevated DRAM prices establish a new baseline.
AI Memory Demand Remains Robust Amid Hyperscaler Capacity Concerns
Lee Jong-wook stated that concerns over AI model efficiency optimization and hyperscaler excess capacity have largely entered a resolution phase, while AI agent demand and cloud companies' AI revenue continue steady growth. The analyst noted that customers persistently request higher-performance HBM and larger-capacity server DRAM. Samsung Securities maintained an optimistic outlook on the memory market, observing that DRAM suppliers have not yet entered a full-scale capacity expansion phase despite anticipated slower price growth in the second half. Lee characterized Samsung Electronics' large-scale memory investment plan and early ramp-up of the Pyeongtaek P5 facility as events demonstrating confidence in long-term demand.
Full-Year Operating Profit Forecast Reaches 372 Trillion Won This Year
Samsung Securities projected Samsung Electronics' annual operating profit at 372 trillion won this year and 565 trillion won next year. The firm expects Q3 profit improvement to be driven by rising memory ASP, while Q4 gains will stem from shipment volume increases. Lee stated that tight memory supply-demand conditions will persist next year due to slower bit growth in both DRAM and NAND, with quarterly operating profit likely to exceed 100 trillion won for over a year. The analyst identified long-term supply agreements (LTA), HBM price negotiations, and expanded shareholder returns as catalysts for future stock price appreciation.
FAQ
What is Samsung Securities' target price for Samsung Electronics?
Samsung Securities maintained a 'Buy' rating and 500,000 won target price for Samsung Electronics on July 6.
Why did Samsung Securities raise its Q2 memory profit estimate for Samsung Electronics?
Samsung Securities raised the Q2 memory segment operating profit estimate from 80 trillion won to 84 trillion won to reflect stronger-than-expected server DRAM prices observed after June, with the server DRAM ASP growth forecast increased from 50% to 55%.
What is Samsung Securities' full-year operating profit forecast for Samsung Electronics?
Samsung Securities projected Samsung Electronics' annual operating profit at 372 trillion won this year and 565 trillion won next year, supported by tight memory supply-demand conditions and sustained AI infrastructure demand.
