A 421% surge in one year, analysts say Samsung Electronics stock remains at its lowest valuation in history

Investing.com - Samsung Electronics’ stock price has increased approximately 421% over the past year, but an analyst believes investors do not need to be deterred by the large gains and points out that the current stock price is still the cheapest in history.

KB Securities analyst Jeff Kim reiterated a “Buy” rating on Samsung Electronics stock, with a target price of 360k won, about 26% higher than Monday’s closing price.

In his research report, Kim wrote: “Although the stock price has risen sharply recently, Samsung Electronics’ current price-to-earnings ratio is only 4.7 times the expected profit for 2027, and we believe this is the lowest valuation for the stock.”

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The core logic of this bullish outlook lies in the storage chip market. Kim predicts that driven by explosive growth in AI-related computing demand, the demand for DRAM and NAND will continue to outpace supply, a trend expected to persist until 2027.

He cited Google data indicating that the company’s Token usage increased by 60% month-over-month, and if this pace continues, consumption will expand to 6.5 times the original amount within a year.

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Kim states: “It is expected that large-scale cloud service providers will spend over $1 trillion on capital expenditures in 2027, and with new chip production lines (P5) coming online between 2028 and 2029, we expect storage demand to continue exceeding supply until 2027.”

Kim forecasts Samsung Electronics’ operating profit in Q2 2026 will reach 84 trillion won, about 18 times higher than the same period last year, with an operating margin of around 50%. For the full year, he predicts operating profit will reach 360 trillion won, more than 8 times that of 2025, with revenue expected to hit 705 trillion won.

In addition to the storage chip business, Kim pointed out two other major catalysts, which are expected to trigger a synchronized surge in the second half of this year.

Samsung Electronics’ foundry business is estimated to incur a loss of about 7 trillion won in 2025, but is expected to approach breakeven by 2027. This improvement is attributed to the potential doubling of orders in 2026 and the possibility of attracting major North American clients to adopt its 2-nanometer process. Kim listed Apple and Qualcomm as potential customers.

Furthermore, Samsung Electronics is expected to start commercializing humanoid robots in the second half of 2026, combining its own AI software with hardware products from its affiliated company Rainbow Robotics.

Kim stated: “Starting from the second half of 2026, Samsung Electronics will simultaneously launch three major growth engines: storage, foundry, and robotics.”

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