[Edaily Reporter Kim Kyung-eun ] Analysis suggests that SamsungElectronics(005930)has entered a phase of historic recovery. Over the past 20 years, SamsungElectronics’ stock price has rebounded more than 60 days after plummeting by more than 40% from its peak in 97% of cases. The analysis explains that while concerns over a slowdown in artificial intelligence (AI) investment and tighter U.S. regulations have been overly reflected in the stock price, earnings forecasts are actually being revised upward.

Kim Dong-won, Head of Research at KB Securities, stated in a report on the 9th, “Now that pessimism has peaked, it is time to focus on the potential for a rebound.”

KB Securities analyzed SamsungElectronics’ stock price trends over approximately 20 years since 2005 and found that when the stock price fell by more than 40% from its peak, the probability of a rebound within 60 days exceeded 97%. SamsungElectronics’ stock price has fallen by more than 50% from the peak it reached on June 19.

Analysts attribute the recent sharp decline to a combination of external uncertainties rather than a deterioration in SamsungElectronics’ earnings. Investor sentiment has been dampened by intensifying competition for capital amid expanding AI infrastructure investments, concerns over the profitability of Big Tech companies, and the possibility of tighter regulations on the AI industry following the U.S. midterm elections.

In contrast to the stock price trend, earnings forecasts are actually rising. KB Securities forecasts SamsungElectronics’ operating profit for this year to reach 381 trillion won—a 774% increase year-over-year—and 640 trillion won next year, a 68% increase. The cumulative operating profit forecast for the next two years amounts to 1,021 trillion won.

“Unlike the stock price correction, SamsungElectronics’ earnings forecasts are actually being revised upward,” said Division Head Kim. “With the price-to-earnings ratio (P/E ratio) having fallen to around 3 times, the gap between earnings and stock price has widened to its widest level in history,” he noted.

He predicted that the likelihood of the U.S. Democratic Party’s stricter AI regulations undermining the semiconductor industry’s structural growth trend is limited. The assessment is that the Democrats, who secured control of both the House and Senate in the recent midterm elections, would find it difficult to completely curb investment in AI infrastructure ahead of the 2028 presidential election.

This is because AI infrastructure investment accounts for more than one-third of U.S. economic growth and plays a crucial role in boosting local employment and local government tax revenue. In fact, in Loudoun County, Virginia, tax revenue from data centers accounts for 38% of the local government’s budget. In Prince William County, the share of such revenue reaches 28%.

Accordingly, analysts predict that rather than imposing a blanket ban on data center construction, the Democratic Party is likely to pursue selective regulation—such as reducing tax incentives or requiring Big Tech companies to bear the costs associated with expanding power infrastructure.

Director Kim emphasized, “While Democratic regulations may slow the pace of AI investment somewhat, they are unlikely to halt the structural demand of the AI era,” adding, “It will be difficult to curb the investment demand of the AI industry, which is a technological revolution.”