Samsung Electronics and SK Hynix stocks declined sharply this month, with Samsung falling 19.16% from 334,000 won to 270,000 won and SK Hynix dropping 27.58% from 2.65 million won to 1.919 million won, according to Korea Exchange data on the 24th. The declines were driven by investor doubts about the sustainability of artificial intelligence investment. Despite the sell-off, 24 domestic brokerages maintain a 'buy' rating on Samsung with an average target price of 513,958 won — 90.35% above the closing price on the 22nd — arguing the stocks have reached extreme undervaluation with 12-month forward price-to-earnings ratios at 4x, below the 6.27x low during the 2008 global financial crisis.
Brokerages Set Samsung Target 90% Above Current Price
Twenty-four domestic brokerages set an average target price of 513,958 won for Samsung Electronics, 90.35% higher than the closing price on the 22nd. SK Hynix's average target price stands at 3,547,917 won, 84.88% above the previous day's close. Brokerages argue that big tech companies will continue AI investment over the next three years. Jung Da-woon, an analyst at LS Securities, stated that current semiconductor concerns relate to margin rates, not peak earnings levels, and that a low-price buying strategy is valid at current prices. The 12-month forward PER for both Samsung Electronics and SK Hynix is at 4x, below the 6.27x level reached during the 2008 global financial crisis.
Investors Question Timing of Stock Recovery Despite Fundamentals
Investors remain cautious despite brokerage optimism, citing uncertainty about when stock prices will rebound. One investor who purchased SK Hynix at the 2.3 million won level stated that the hesitation stems not from doubts about the companies' growth potential or competitiveness, but from lack of confidence about the timing of a price recovery. Semiconductor stocks are cyclical and sensitive to economic conditions, with prices historically declining before earnings peak or rebounding on industry improvement expectations even during weak performance periods. Park Jong-hoon, director of the Knowledge Economy Research Institute, noted that memory semiconductor stock prices lead the cycle by approximately 18-24 months, making them difficult for novice investors to approach, and emphasized the need for constant skepticism and verification rather than unconditional optimism.
FAQ
What caused Samsung Electronics and SK Hynix stock prices to fall this month?
The primary factor behind the declines was investor doubts about the sustainability of artificial intelligence investment. Samsung Electronics fell 19.16% and SK Hynix dropped 27.58% this month, according to Korea Exchange data on the 24th.
What are brokerages' target prices for Samsung Electronics and SK Hynix?
Twenty-four domestic brokerages set an average target price of 513,958 won for Samsung Electronics, which is 90.35% above the closing price on the 22nd. For SK Hynix, the average target price is 3,547,917 won, 84.88% higher than the previous day's close.
