Goldman Sachs Raises Price Targets for Micron, Samsung Electronics, and NVIDIA: Valuation Framework Shifts from P/B to P/E

BlockBeats News, June 1st - Today, Goldman Sachs released a comprehensive global semiconductor storage industry report, formally conducting a substantial overall target price increase for SK Hynix, Samsung Electronics, and Kioxia. Among them, SK Hynix's target price has been raised to the range of 3.3 to 3.5 million South Korean Won (implying approximately 53% upside), Samsung Electronics' target price has been raised to 480,000 South Korean Won (implying approximately 60% upside), and Kioxia's rating has been upgraded to "Buy" with a 12-month target price set at 93,000 Japanese Yen. The core logic behind this upward revision is a historic shift in the storage industry's valuation framework—Goldman Sachs believes that AI-driven demand sustainability, supply constraints, and the prevalence of Long-Term Agreements (LTA) are driving the storage industry's transformation from a highly cyclical commodity track to an AI infrastructure track with predictable profitability. The industry benchmark has officially transitioned from Price-to-Book (P/B) to Price-to-Earnings (P/E), currently anchored at around 9 times P/E.

The report also significantly revised upward the supply-demand gap forecast, predicting that shortages in the three major categories of DRAM, NAND, and HBM will persist until 2028, with HBM facing the most severe shortage. The market size of HBM in 2027 has been revised upward by 54% to $116 billion. Previously, Morgan Stanley and JPMorgan had already pointed out that the widespread implementation of LTAs is transforming storage giants' cyclical businesses into technology infrastructure with stable cash flow properties, with only a 7.3 times forward P/E currently trading at a 50%-80% discount compared to TSMC, presenting a historic narrowing opportunity. However, Goldman Sachs also cautioned that the only solid evidence that can support the new valuation framework is tangible prepayments on the balance sheet and legally locked deferred revenue obligations; otherwise, the narrative of crossing the cycle may still risk repeating the pitfalls of forward contracts becoming worthless paper, as seen in 2017.