Key Moments
- Samsung Electronics has surged 108% year-to-date; however, Morgan Stanley still expects a “very strong 2026.”
- The bank forecasts “very strong 4Q25 prelims on January 8,” led mainly by rising memory profits.
- Memory profits could grow 310% in 2026, with DRAM and NAND prices driving earnings toward KRW100 trillion.
Brokerage Flags Strong Setup Despite Massive Rally
Investing.com — Morgan Stanley believes Samsung Electronics’ rally still has room to run, even after shares climbed 108% year-to-date. In a recent note, analyst Shawn Kim said the company is “setting up for a very strong 2026.” He pointed to supportive demand trends, tight supply, and improving competitive positioning.
However, Kim cautioned that expectations are already elevated. As a result, investor focus will shift to how markets react to upcoming results. He stressed that “the reaction to the print is always more important than the data itself.”
Memory Pricing Momentum Drives Earnings Outlook
Meanwhile, Morgan Stanley identified rising memory prices as the main earnings driver. According to the note, DRAM prices are tracking close to 50% quarter-on-quarter growth. At the same time, NAND prices are rising about 30%, helped by a stronger mix of server and eSSD products.
Additionally, Kim said HBM4 sample feedback remains positive. Importantly, no revisions have been required so far, which supports confidence in advanced memory demand.
Fourth-Quarter 2025 Preview Shows Broad Strength
Looking ahead, Morgan Stanley expects Samsung to post KRW18 trillion in preliminary operating profit for the fourth quarter. Notably, more than KRW15 trillion should come from the memory division alone.
Beyond memory, the bank also sees improvement in the foundry business. Meanwhile, smartphone demand and OLED panel sales are expected to remain resilient.
| Metric | Detail |
|---|---|
| 4Q25 preliminary operating profit | KRW18 trillion (forecast) |
| 4Q25 memory operating profit | More than KRW15 trillion (forecast) |
| DRAM pricing trend | Near +50% quarter-on-quarter |
| NAND pricing trend | Around +30% quarter-on-quarter |
As a result, Morgan Stanley views the January 8 preliminary results as a key milestone. The bank expects these numbers to shape sentiment heading into 2026.
Early-Stage Memory Upcycle Supports 2026 Outlook
Despite the stock’s strong gains, Morgan Stanley argues the memory cycle remains in its early phase. Therefore, the firm sees significant upside ahead.
Specifically, the bank estimates that Samsung’s memory profits could rise 310% in 2026. If pricing trends hold, earnings could approach KRW100 trillion.
Supporting this view, Morgan Stanley expects DRAM prices to increase another 30% to 40% in the first quarter of 2026.
Valuation Seen Moving Back Toward Prior Peak
Finally, Morgan Stanley believes valuation still offers upside. The firm expects Samsung shares to test their previous 2x price-to-book peak.
Kim noted that earnings forecasts continue to rise sharply. Meanwhile, he sees recent HBM-related issues as temporary. As a result, improving sentiment and strong profit momentum could continue to support the stock.
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