Samsung Electronics upgraded to Buy on a looming memory shortage

Published 16/10/2025, 14:32
© Reuters.

Investing.com -- UBS upgraded Samsung Electronics to Buy from Neutral, saying the chipmaker is set to benefit from a tightening memory market that could drive sharp upside in earnings over the next two years.

“We believe the memory industry is entering acute shortages from now and into 2026,” UBS said

Samsung’s memory division, should contribute about 83% of group operating profit in 2026 in positioned to capture the gains amid “acute shortages” in DRAM and NAND supply from late 2025 into 2026.

UBS raised its price target on the company’s global depositary receipts to $1960 from $1650.

Industry checks suggest hyperscale cloud firms are seeking about double the DDR capacity in 2026 versus 2025, with smartphone makers also requesting around 20% more.

UBS lifted its contract price forecasts, now seeing DRAM prices rising 17% in the fourth quarter of 2025 and 15% in the first quarter of 2026, while NAND is expected to climb 15% and 10% in the same periods.

Beyond memory, UBS highlighted narrowing losses in Samsung’s foundry and LSI units and steady smartphone demand.

Analysts at UBS now expects operating profit of Won94.1 trillion in 2026, 59% above consensus estimates, with earnings per share rising 47% that year.

UBS also pointed to Samsung’s progress in high bandwidth memory, saying HBM4 samples are nearing qualification for Nvidia.

At 1.36 times forward book value, the brokerage said the stock underestimates Samsung’s return profile through 2030.

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