Samsung Shares Surge 400%: Why Analysts Still Believe the Stock Is Undervalued

Samsung Shares Surge 400%: Why Analysts Still Believe the Stock Is Undervalued

Strong AI Demand, Memory Chips and Robotics Could Drive Further Growth

Samsung Electronics shares have risen more than 400% over the past year, but some analysts believe the stock could still offer significant value for long-term investors.

KB Securities analyst Jeff Kim recently maintained a Buy rating on Samsung shares with a target price of 360,000 Korean won. This suggests the stock could still rise by around 26% from recent levels.

According to Kim, Samsung remains attractively valued despite its huge rally. He noted that the company is trading at around 4.7 times projected 2027 earnings, which he described as “the cheapest the stock will get”.

A major reason behind the optimistic outlook is the continued growth in artificial intelligence (AI). Demand for memory chips such as DRAM and NAND is expected to increase rapidly as AI computing expands worldwide.

Key drivers behind Samsung’s growth outlook include:

• Rising global demand for AI-powered computing
• Strong growth in memory chip sales
• Increasing investment from major technology firms
• Expansion of Samsung’s foundry business
• Potential growth in humanoid robotics

Kim highlighted that large technology companies, often called hyperscalers, are expected to spend more than $1 trillion on infrastructure by 2027. This could create substantial demand for advanced memory chips.

Google reportedly recorded 60% quarter-on-quarter growth in AI token usage. If this pace continues, demand for computing power could rise dramatically over the next year.

Samsung is expected to benefit because its memory chip business is already well positioned to supply the growing AI market.

The analyst also forecast major improvements in profitability. Samsung’s operating profit for the second quarter of 2026 is expected to reach 84 trillion won, roughly 18 times higher than the same period last year.

For the full year, projected figures include:

• Operating profit of 360 trillion won
• Revenue of 705 trillion won
• Operating margins close to 50%

Samsung’s foundry division could also become an important growth engine. The business reportedly lost around 7 trillion won in 2025, but analysts believe it could move close to breakeven by 2027.

Future contracts with large US technology firms could strengthen this division further. Apple and Qualcomm have both been mentioned as possible customers for Samsung’s advanced 2-nanometre chip manufacturing process.

Another potential growth area is robotics. Samsung is expected to begin commercialising humanoid robots in the second half of 2026 using AI software combined with hardware from Rainbow Robotics.

By late 2026, analysts believe Samsung could have three major growth businesses operating simultaneously:

• Memory chips
• Foundry manufacturing
• Humanoid robotics

Conclusion for Investors

Samsung’s rapid share price growth may appear intimidating, but analysts argue the company could still be undervalued compared with its future earnings potential. Investors looking for exposure to AI, semiconductor manufacturing and emerging robotics technology may see Samsung as a long-term growth opportunity.

However, as with any investment, risks remain. Semiconductor demand can fluctuate, competition is intense, and future growth projections may not materialise exactly as expected. Investors should carefully consider valuation, market conditions and their own risk tolerance before investing.

Sources: (Investing.com, Fool.com)