Investing.com -- Barclays (LON:BARC) analysts reiterated an Overweight rating on Samsung Electronics (KS:005930) shares, stressing that they “remain too cheap” despite cuts to estimates.
However, the analysts see “limited positive catalysts near term however which could hold back the shares for the time being,” prompting them to cut their price target to $1250 from $1300.
According to Barclays, a key factor for Samsung’s future performance hinges on the qualification with Nvidia (NASDAQ:NVDA) for its HBM3E 12 hi memory solution.
The investment bank voiced concerns about the ambitious timelines and potential delays in receiving approval, which could postpone a significant growth driver for Samsung’s memory revenues.
“We still give the benefit of the doubt in 2026 estimates that they will catch up but current expectations could prove optimistic (again) and we assume somewhat of an HBM air pocket in 1Q25,” analysts led by Simon Coles added.
In their note, analysts also pointed out potential challenges from China’s advancements in the memory space.
While Samsung holds a low share in China’s smartphone market, the progress of Chinese firms in commodity DRAM could pressure Samsung’s memory prices throughout the year.
Samsung cautioned on Friday that sales of its AI chips could be sluggish this quarter due to US export restrictions on China. The company is also working on launching an upgraded version of its high-end chips.
While AI chips have been a bright spot in an otherwise weak memory market, Samsung has faced challenges in meeting Nvidia’s standards for high-bandwidth memory (HBM) chips. Meanwhile, rival SK Hynix Inc (KS:000660) remains Nvidia’s primary supplier for these AI-focused GPUs.
But despite these concerns, Barclays maintains its bullish rating on Samsung stock, as it expects a material upside in the long run.
To reflect near-term headwinds, the firm trimmed its revenue forecasts, leading to significant downgrades in expected earnings before interest and taxes (EBIT), which in turn prompted the price target cut.