AI Boom: Nomura and JPMorgan Bet Big on Korean Chip Stocks
Despite Kospi volatility, Nomura and JPMorgan predict a massive AI-driven boom for Samsung and SK hynix through 2028.
While the Kospi index has been riding a rollercoaster of volatility, global financial giants are not blinking. Nomura and JPMorgan are doubling down on Korean chip stocks, betting that the artificial intelligence (AI) revolution is creating a memory boom with significant room to grow.
The benchmark index has seen dramatic swings recently, with semiconductor titans Samsung Electronics and SK hynix at the heart of the turbulence. Investors have been reassessing the trajectory of AI demand, leading to sharp market movements. For instance, on Wednesday, the Kospi climbed 3.29 per cent to close at 5,735.66, fueled by intraday surges of over 7 per cent for both Samsung and SK hynix—a move so rapid it triggered a five-minute buy-side sidecar. This rebound came shortly after a massive 7.57 per cent plunge the previous Thursday, which had forced a 20-minute marketwide trading halt.
Nomura Predicts Massive Upside
Despite these wild fluctuations, Nomura remains steadfast in its bullish stance. In a recent report, the brokerage forecasted that supply bottlenecks for memory chips will persist at least until 2028. Nomura has identified Samsung and SK hynix as its top picks, maintaining "buy" ratings with ambitious price targets.
The projections are staggering: Nomura has set a price target of 670,000 won (USD 505) for Samsung and 4.7 million won (USD 3,544) for SK hynix. To put this in perspective, these targets are roughly three times and 3.6 times their respective closing prices as of Wednesday.
Nomura also addressed fears regarding China's ChangXin Memory Technologies, which reportedly plans to launch next-generation server memory by the end of the year. Nomura dismissed the market's negative reaction to this news as "excessive," stating that investors are underestimating the sheer breadth of AI demand and the resulting earnings potential across the entire value chain.
JPMorgan Sees Trillion-Dollar Potential
JPMorgan has echoed this optimism, maintaining "overweight" ratings for equities in both Korea and Taiwan. The US investment bank expects AI-related stocks to be the primary engine driving Asian market gains well into next year.
Like Nomura, JPMorgan anticipates tight supply-demand conditions through 2028. The bank suggests this scarcity will grant Asian firms "significant pricing power" alongside volume growth, potentially pushing the net income across the ecosystem to over USD 1 trillion. The bank urged investors to remain open-minded about the true extent of the AI upside.
A Shift in the Memory Cycle
Local Korean brokerages are also aligning with this global confidence, suggesting that the AI era has fundamentally changed the semiconductor industry. Historically, memory demand was tied to the cyclical nature of PCs and mobile devices, making the sector prone to boom-and-bust cycles.
"The nature of memory demand in the AI era is different from what it was in the past," noted Han Dong-hee, an analyst at SK Securities. "With AI emerging as a new source of demand, the industry's sensitivity to economic cycles has weakened significantly."
Mirae Asset Securities has similarly maintained an "overweight" rating on the semiconductor sector. Analyst Kim Young-gun emphasized that AI demand remains "extremely resilient" with no indicators of a slowdown, advising investors to trust the optimistic outlook provided by industry leaders rather than succumbing to pessimism.
Current Price Targets at a Glance
- Nomura: Samsung (670,000 won / USD 505), SK hynix (4.7 million won / USD 3,544)
- Mirae Asset Securities: Samsung (400,000 won / USD 302), SK hynix (3.1 million won / USD 2,337)