Bernstein sees Samsung gaining HBM share, cuts SK Hynix target

Investing.com -- Bernstein said Samsung Electronics is set to gain share in high-bandwidth memory, as it kept its 440,000 won price target on the stock in a note on Tuesday.

Analyst Mark Li lowered his price target on rival SK Hynix to 2.7 million won from 3.3 million won, citing more conservative assumptions on HBM progress and pricing. He kept Outperform ratings on Samsung, SK Hynix, Micron and SanDisk, and an Underperform rating on Kioxia.

"We still prefer Samsung among the incumbent suppliers," Li wrote.

Bernstein cut its 2027 HBM price assumptions after Korean memory export data in July and August showed strong signals for Samsung but weaker ones from SK Hynix's HBM production site.

Continued reports of supply difficulties with HBM4 also led Li to push back slightly the shift from the current HBM3E generation. As a result, he expects HBM to stay less profitable than conventional DRAM in 2027.

The firm expects conventional memory prices to rise by the mid-teens to 20% in the third quarter from the previous quarter, followed by a high-single-digit rise in the fourth. Shortages should persist in 2027, though caps in long-term agreements will limit further increases.

Bernstein still expects prices to normalize in 2028 as capacity grows and AI investment meets constraints such as borrowing costs and environmental concerns. It sees suppliers' gross margins easing from about 90% at the peak to the high 70s by the end of 2028.

Bernstein raised its Kioxia target to 49,000 yen from 40,000 yen on a better NAND pricing outlook, but kept its Underperform rating. It cited a bigger-than-expected threat from China's YMTC. Micron's target was kept at $1,300 and SanDisk's at $3,000.

Original Article

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