ChainThink reports that, according to Morgan Stanley’s Asia Technology report released on August 6, the bank maintains its “attractive” rating on the South Korean technology sector and keeps its target prices for Samsung Electronics and SK Hynix unchanged.
The report sets SK Hynsis' target price at KRW 2.6 million, implying approximately a 74% upside; Samsung Electronics' common stock target price is set at KRW 381,000, implying approximately a 65% upside, with Samsung remaining the bank's Top Pick.
Morgan Stanley believes that the recent sharp correction in the memory industry appears to be over, with market focus shifting from simply chasing price increases toward buybacks, long-term agreements, and capital returns.
The report also noted that DRAM price increases may begin to slow starting in the fourth quarter, as rising inventories and new supply entering the market will make it more difficult to continue significantly exceeding profit expectations. The report further stated that AI demand remains strong, with cloud providers generally reporting insufficient computing power supply.
Its cloud capital expenditure tracker has raised its 2027 growth forecast from 14% to 29%.
Long-term supply agreements are seen as key to re-evaluating memory stock valuations, with Samsung planning to include 60%-70% of its capacity in long-term contracts, and SK Hynix having completed negotiations with approximately ten customers.