Morgan Stanley sharply lowered its long-term earnings outlook for Samsung Electronics and SK Hynix, in a marked divergence from Nomura’s view. According to Sina Finance, Morgan Stanley cut its SK Hynix target price by 38% to 1.6 million won and its Samsung target by 19% to 309,000 won on Monday, citing rising chip supply and risks that data center construction could be delayed in 2028.
Nomura maintained target prices of 4.7 million won for SK Hynix and 670,000 won for Samsung in a report last Thursday—2.9 times and 2.2 times Morgan Stanley’s revised targets, respectively. Both firms were positive on earnings next year: Morgan Stanley raised its 2027 operating profit forecasts for Samsung and SK Hynix by 9% and 13%, respectively, while lowering its long-term margin assumptions for SK Hynix. Analyst Shawn Kim lowered the company’s projected average operating margin for 2029–2035 from 53% to 28%.
Morgan Stanley moved about 4.9 gigawatts of computing capacity originally expected in 2028 to 2029, and cut its forecast for annual growth in global data center capacity additions that year from 21% to 9%. It still expects 43.3 gigawatts of new capacity in 2028. Nomura’s October 19 global memory report said demand growth would outpace supply growth at least through 2028, supporting continued tightness and strong prices.
SK Hynix said on its October 28 earnings call that it had agreements with 14 major customers covering more than half of its planned capacity for 2027 and 2028. The agreements allow prices to adjust with market conditions within agreed ranges, leaving the company exposed to future price declines.
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