Goldman Sachs Raises Price Targets for SK Hynix and Samsung: The Strongest Storage Cycle in History Drives Record-Breaking Performance

Wall Street investment bank Goldman Sachs recently released a report, raising the target prices and earnings forecasts for South Korean chip giants SK Hynix and Samsung Electronics across the board. Goldman pointed out that driven by AI demand and tight supply in the traditional storage market, the industry is entering the strongest storage upcycle in history, which will push both companies to achieve record profits and profit margins in 2026.

According to Wind trading platform sources, Goldman’s Giuni Lee team has raised SK Hynix’s 12-month target price from 1.2 million won to 1.35 million won, and Samsung Electronics’ target price from 205,000 won to 260,000 won, reaffirming a “Buy” rating for both companies. Based on higher expectations for DRAM and NAND flash memory prices, Goldman significantly increased its first-quarter 2026 operating profit forecasts for both firms. According to Bloomberg consensus estimates, Goldman’s Q1 operating profit forecasts of 34.7 trillion won for SK Hynix and 40.3 trillion won for Samsung Electronics are 8% and 6% above market expectations, respectively.

This aggressive upward revision reflects strong pricing dynamics in the storage market. Goldman’s latest channel surveys show that early pricing negotiations for DRAM and NAND in Q2 are already significantly higher than expectations from a few months ago. As AI and server-driven demand absorb most of the new supply, even amid sluggish demand for PCs and smartphones, core application storage chips remain in extremely tight supply.

Robust fundamentals will directly translate into unprecedented financial returns. Goldman expects SK Hynix’s return on equity (ROE) this year to surpass 80%, a record high, while Samsung Electronics’ operating profit will grow more than fivefold year-over-year. Although the model incorporates the possibility of a mild correction in storage prices in 2027, Goldman notes that the current valuation levels of both companies remain highly attractive.

Storage Chips Enter the Strongest Upcycle in History

Goldman has sharply raised its price forecasts for traditional storage chips. For SK Hynix, Goldman expects its traditional DRAM prices in Q1 2026 to surge 88% quarter-over-quarter, and NAND prices to rise 58%. Based on this, the average selling price of conventional DRAM in 2026 is expected to increase by 243% year-over-year.

For Samsung Electronics, Q1 prices for DRAM and NAND are expected to increase by 88% and 71% quarter-over-quarter, respectively, with NAND prices projected to soar 164% year-over-year for the full year.

This pricing environment will lead to unprecedented profit margins. Goldman forecasts that SK Hynix’s DRAM and NAND operating profit margins will soar above 70% and 40%, respectively, breaking all previous records. Samsung’s DRAM operating profit margin is also expected to reach 71%, with NAND margins at 46%, not only setting new records but also matching or surpassing peaks seen during the 2017-2018 upcycle.

AI and HBM Demand Reshape Performance Landscape

In addition to the revival of traditional storage, breakthroughs in high-bandwidth memory (HBM) are another key driver. Goldman reaffirms its expectation that SK Hynix will maintain a solid leadership position in AI storage, projecting its full-year operating profit in 2026 to reach 202 trillion won, with ROE jumping from 44% last year to over 81% this year.

Samsung Electronics has also made significant progress in HBM. Thanks to the industry’s first HBM4 launch and shipments, its steady position in Google TPU, and increased market share in Nvidia, Goldman expects Samsung’s HBM revenue to grow 158% year-over-year in 2026, reaching $15 billion.

This shift is also reflected in Samsung’s customer structure, with Alphabet replacing Verizon in its top five clients by 2025, indicating a rapid shift toward servers and AI applications. Driven by this, Samsung’s overall operating profit in 2026 is expected to reach 239 trillion won.

However, Goldman also notes that rising storage component costs will significantly pressure Samsung’s smartphone profit margins, with an expected decline to a historic low of 4% this year.

Capital Expenditure Boost and Valuation Attractiveness

Facing tight supply, both companies plan to further expand capital expenditures. Goldman has raised its 2026 storage capex forecasts for SK Hynix and Samsung Electronics to 40 trillion won and 46 trillion won, respectively.

Goldman emphasizes that industry capital spending will be heavily skewed toward high-margin DRAM and HBM, and since most incremental funds are allocated to infrastructure preparations, substantial capacity releases into the market in the short term are unlikely. Additionally, Samsung Electronics invested a record 37.7 trillion won in R&D in 2025 (up 8% YoY) to solidify its technological lead.

Regarding valuations, Goldman believes that even factoring in the expected slight correction in prices in 2027, both stocks remain undervalued. Based on 2027 projections, SK Hynix’s P/E ratio is 4.5x, P/B ratio 1.7x, with ROE at 46%; Samsung Electronics’ P/E is 6.8x, P/B 1.7x, ROE 28%.

Combined with SK Hynix’s stock buybacks, dividends, and potential ADR listings, as well as Samsung’s plan to cancel nearly 87 million shares, Goldman maintains a highly constructive outlook for both companies’ mid- to long-term prospects. The main risks highlighted include macroeconomic weakness leading to storage supply-demand deterioration, delays in technological advancements, and Samsung’s potential market share loss in the mobile OLED segment.

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