Friends, let's talk about a company you all know
Meet Samsung!
Is Samsung emerging as a company that could stand out significantly in the coming years?
Just recently, Samsung became a supplier to two chip giants, Nvidia and AMD,
It is also a partner in Elon Musk's largest chip project in the world.
And all of this has not yet been included in the latest quarterly report...
A few weeks ago, Samsung reported its quarterly results and beat estimates with historical record profits and simply monstrous numbers.
The company reported revenue of 133 trillion won (approximately $88.6 billion) and operating profit of 57.2 trillion won (approximately $38.1 billion).
This represents an inconceivable 755% surge in operating profit compared to the same quarter last year, when profit stood at only about 6.68 trillion won!
These results significantly surpassed early market estimates that projected a profit of 50 trillion won; this is the first time the company's revenue has crossed the 100 trillion won mark in a single quarter.
In fact, the operating profit in this quarter alone is higher than the operating profit for all of last year, which stood at 43.6 trillion won, highlighting the strength of the company's recovery.
The main driver behind this surge is the semiconductor division, which benefited from a sharp increase in memory prices due to a global supply shortage; analysts estimate that the division's profits alone will range between 37 and 48 trillion won.
However, this is not just about a generic price increase but a shift to high-value-added products like HBM3E memory supplied to giants such as Nvidia, Google, and AMD.
Additionally, Samsung is the first in the world to start supplying the sixth generation of memory, HBM4, which is expected to be integrated into Nvidia's next AI platform, 'Vera Rubin',
This combination of the world's largest production capacity and growing demand for artificial intelligence creates particularly positive momentum, leading to an expected price increase of 250% in DRAM and 187% in NAND compared to last year.
Following the results, KB Securities raised the stock's price target to 360,000 won (approximately $240) and maintained a 'buy' recommendation.
The interesting part? They are simply joining a huge line of investment firms that have raised their price target for Samsung.
And what is particularly interesting is the following data point:
You might not believe it, but it's true:
They predict that the company could claim the top spot globally in operating profit as early as next year, with a profit forecast of 327 trillion won (approximately $218 billion) for the current year and 488 trillion won (approximately $325.3 billion) for next year.
A very important point to note is that although the operating profit gap between Samsung and Nvidia is only about 30 trillion won, Samsung's market cap is only about 19% of Nvidia's.
This data point might indicate (perhaps) an incorrect valuation of the stock, especially as the use of artificial intelligence moves from the learning phase to the inference phase and requires enormous amounts of memory that will continue to drive the company's profits forward in the coming years.
You're probably asking...
What do American market investors have to do with a South Korean company?
And here we have new news:
The American market has been updated, and you too have the opportunity to gain direct exposure to Samsung, also in the American market.
More on that in the next post!