UBS Upgrades Samsung Electronics as Memory Market Tightens, Forecasts Strong Earnings Growth

UBS has upgraded Samsung Electronics to Buy from Neutral, citing an upcoming boom in the global memory chip market that could drive significant earnings growth through 2026. The investment bank believes the memory industry is entering an “acute shortage” phase, with demand outpacing supply in both DRAM and NAND segments starting late 2025.

UBS raised its price target for Samsung’s global depositary receipts to $1,960 from $1,650, reflecting strong optimism about the company’s earnings outlook. The brokerage expects Samsung’s memory division to contribute around 83%of total operating profit by 2026, as hyperscale cloud firms and smartphone manufacturers ramp up their memory requirements. Industry checks show cloud companies could double their DDR capacity by 2026, while smartphone makers are forecast to demand 20% more memory next year.

UBS also upgraded its DRAM and NAND price forecasts, predicting DRAM prices will rise 17% in Q4 2025 and 15% in Q1 2026, while NAND prices are expected to increase 15% and 10%, respectively. The firm anticipates that tightening supply, paired with accelerating demand for AI-driven infrastructure, will lift Samsung’s profit outlook.

Beyond memory, UBS noted improving performance in Samsung’s foundry and LSI businesses, along with steady smartphone demand. The bank now projects operating profit of ₩94.1 trillion in 2026, about 59% above consensus, and earnings per share rising 47% that year.

UBS also highlighted Samsung’s advancements in high bandwidth memory (HBM) technology, saying HBM4 samples are nearing qualification for Nvidia, underscoring its position in the fast-growing AI chip market. With the stock trading at 1.36 times forward book value, UBS believes the market still underestimates Samsung’s long-term return potential through 2030.