[Edaily Reporter Nam Soyeon ] Although global investment bank Morgan Stanley has significantly lowered its target prices for Samsung Electronics and SK Hynix, retail investors are reacting with a bittersweet sentiment, saying, “We’d be happy if the stock just reached that price.” This is because, following the recent sharp decline in the share prices of both companies, even the downwardly revised target prices remain considerably higher than current market prices.

In a report titled “Memory Semiconductors—Key Issues Following the U.S. Midterm Elections” released on the 9th, Morgan Stanley lowered its target price for Samsung Electronics from 381,000 won to 309,000 won—a reduction of approximately 19%—and its target price for SK Hynix from 2.6 million won to 1.6 million won—a reduction of approximately 38%.

Sean Kim, the Morgan Stanley analyst who authored this report, has earned the nickname “the Grim Reaper of the semiconductor industry” in South Korea for warning of a downturn in the semiconductor market through reports such as “Memory: Winter Is Coming” (2021) and “Winter Is Approaching” (2024).
Morgan Stanley’s decision to lower the target price this time stems not so much from immediate earnings weakness as from concerns that the semiconductor market’s profitability could deteriorate significantly after 2028.
Analyst Sean Kim noted, “The most critical debate in the memory semiconductor market right now is whether the industry can avoid an ‘earnings cliff’ in 2028,” adding, “Concerns are growing not so much about next year’s earnings themselves, but rather about whether the industry can achieve and sustain growth after 2028.”
While demand for memory semiconductors is surging due to expanding investment in artificial intelligence (AI) data centers, the supply shortage could ease once new production facilities begin full-scale operations starting in late 2027.
On the other hand, the report noted that if regulations on AI data center construction are tightened following the U.S. midterm elections, new data center investments could be delayed beyond initial expectations.
The analysis suggests that if semiconductor production increases while the construction of data centers—a major source of demand—is delayed, an oversupply could occur, putting pressure on semiconductor prices and corporate profitability.
Additionally, the report identified the expansion of general-purpose memory supply by Chinese companies and intensifying competition in the high-bandwidth memory (HBM) market as risk factors. It suggests that as competition among suppliers—including Samsung Electronics, SK Hynix, and Micron—intensifies, it may become difficult to maintain current high profit margins.
However, Morgan Stanley has not revised its earnings outlook for semiconductor companies to a negative outlook.
On the contrary, it raised its operating profit forecasts for Samsung Electronics and SK Hynix for next year by 9% and 13%, respectively, compared to previous estimates. It also maintained its “Overweight” rating for both companies.
Despite the outlook featuring significantly lowered target prices, retail investors are reacting in an unexpected way. This is because, following the recent sharp drop in stock prices, there has been a stream of self-deprecating comments expressing hope that the stock prices would at least reach the revised target prices.
Retail investors have been sharing the report on brokerage apps and online communities, commenting, “I’d be happy if it at least reached that level,” and “If it gets to that point, I can get out unscathed.” One investor confessed, “I’ve already given up on taking profits and am timing my stop-loss,” adding, “I’ll sell my entire position at the midpoint between Morgan Stanley’s target price and the current stock price.”
In fact, Samsung Electronics and SK Hynix have recently fallen sharply as selling pressure has intensified, particularly on AI-related stocks, following the U.S. midterm elections.
Foreign investors, in particular, net sold approximately 8 trillion won worth of Samsung Electronics and SK Hynix shares last week alone, causing the stock prices of both companies to plummet. Over the course of the week, Samsung Electronics fell 16.13% and SK Hynix dropped 20.16%.
However, the stocks managed to rebound this week as bargain hunters stepped in.
According to the Korea Exchange on the 10th, Samsung Electronics closed at 198,900 won, up 4.74% from the previous trading day. SK Hynix also closed at 1,212,000 won, up 6.69%. Both stocks rose for two consecutive days, partially recouping the losses from last week’s sharp decline.