Daniel Romero
Technology Equity Analyst, Semiconductors/Data Centers/Physical AI
Samsung Electronics' extraordinary profitability despite an FX hit and rising DRAM prices undermine the case for a memory-price crash. It is the world's most profitable company. Wall St Engine's Q3 summary reports $80.4B in operating profit, up 783% year over year, DRAM selling prices up about 20% quarter over quarter, and Samsung's expectation that memory supply stays tight into 2028. x.com
Samsung Electronics is set to generate profits exceeding its entire market cap within three years, a rational base case. Nomura forecasts operating profit of KRW 391 trillion in 2026, 635 trillion in 2027 and 774 trillion in 2028, about $1.25 trillion combined versus a $1.2 trillion market cap; Goldman Sachs projects about $1.1 trillion and added Samsung to its APAC Conviction List after a 40% fall. Cash flow forecasts include capex, and Samsung has kept its pledge to return 50% of it. x.com x.com x.com x.com x.com
Samsung Electronics' surging profits show how the AI memory shortage is paying suppliers. Quarterly operating profit reached ₩107tn, nearly nine times a year ago, while sales more than doubled to ₩195.3tn. Alongside SK hynix's results and Microsoft's willingness to pay more for memory, the memory supercycle looks real. x.com
SK hynix's surging earnings challenge the idea that commodity memory profits are about to vanish. The attached report says third-quarter operating profit rose more than sevenfold and its operating margin reached 80%; analysts quoted there expect the earnings climb to continue at least through next year. Micron and Samsung are named alongside SK hynix. x.com
Samsung's record quarter looks closer to a peak than a new base: conventional DRAM shipments are flat year on year, while higher prices per bit drove profits despite a revenue miss. Its phone unit is cutting output because memory costs too much, and AI chip designers are seeking to use less HBM. Buyers' response threatens the price-led margin surge. The October 29 divisional earnings breakdown may show whether memory profit grew much faster than group profit. x.com
More memory CapEx may yield proportionally fewer bits as HBM consumes more wafer capacity, supporting SK hynix and Samsung's pricing. Both reported double-digit quarterly DRAM and NAND price gains; Samsung targets 60-70% of mid- to long-term capacity under LTAs. SK hynix has the stronger execution record, but Samsung could benefit enormously from conventional memory without winning HBM4. If trends persist, normalized margins could rise, though memory remains cyclical. x.com
Samsung Electronics' quarter was a quality beat, not a miss, because it is now almost entirely a memory business. Operating profit reached 107.4 trillion won, up about 9x, with a record 55.1% margin in its first 100-trillion-won quarter; revenue of 195.0 trillion won missed on unprofitable TVs and phones. Conventional DRAM is tight as capacity shifts to HBM, pricing is strong and HBM4 is ramping. The segment report should make memory look even stronger. Still a buy with a 500,000 won target. … Show more
Samsung Electronics faces downside risk because its parabolic run has made market expectations unrealistic, so one mistake could release gravity. Wall Street Engine's Q3 highlights showed revenue, operating profit and net profit below estimates despite triple-digit year-over-year growth. x.com
SK hynix's five-year agreements with 14 major customers cover more than half its 2027-28 capacity, giving its memory earnings unusually long visibility. DRAM prices rose 28% and NAND 25% in the quarter, while operating profit reached 62.8 billion against 58.5 billion expected; Q4 DRAM shipments are guided up 25% from Q3. Those commitments support the view that demand is not peaking yet. Overweight, $400 target. x.com
Samsung Electronics' Q3 profit is even more impressive than it looks, because the won surged 4-5% quarter on quarter while most of its expenses are in won and its sales are in dollars. Delivering that profit through a stronger won points to even higher underlying margins. x.com
Inflation, rising rates, Chinese competition and rising AI-related financial costs are pressuring the memory market. Micron, Samsung and SK hynix look exposed; waiting for the cycle to turn. x.com x.com
Samsung Electronics and SK hynix can invest heavily and still generate free cash flow that makes memory stocks look strikingly cheap. In 2027, they will spend $150B combined on capex yet generate $500-600B of free cash flow, against just $1.8T of combined enterprise value, or less than 3.5x 2027 FCF. Long memory. x.com
