In the era of artificial intelligence (AI), “invitation” is a graphic processing unit (GPU). You need GPUs to do AI business. However, Nvidia is the company that monopolizes this GPU. The head of the company, Jensen Huang, recently came to a Korean chicken restaurant to discuss future business with Samsung Electronics Chairman Lee Jae-yong and Hyundai Motor Chairman Chung Eui-sun.
The three became “kkkaboo (friends)”. However, SK Hynix is closely connected to the business first. This company is the number one in high bandwidth memory (HBM) that determines GPU performance. Hynix is already a kkangbu, and from Jensen Hwang’s point of view, Samsung Electronics and Hyundai Motor have welcomed new friends.
On Wall Street, both Samsung and Hyundai Motor are paying attention to the AI era and believe that there is room for their stock prices to rise further. In other words, this is the case when considering the target stock price of major investment banks in Bloomberg. Samsung Electronics is still more likely to be on the rise. On the basis of net profit (margin), there are also predictions that Hyundai Motor will grow steadily.
Samsung Electronics, which makes both general-purpose and special-purpose chips, will start to benefit from now on
Foreign investors have always been interested in Samsung Electronics and Hyundai Motor. Wall Street’s spotlight shines on the two stocks due to the “Kkangbu Meeting” with Nvidia. Bloomberg data shows the expected performance of the two listed companies through 2029. The next four years are also a period of consensus that the AI era will continue.
Samsung Electronics’ sales last year were 300 trillion 870.9 billion won. This year, it will increase by 8.1%, and next year, after passing 15.8%, the expected sales growth rate in 2027 reached 8.8%, finally opening the era of 400 trillion won in sales (409 trillion won). This is more optimistic than the estimate of domestic securities firms in 2027 (KRW 405 trillion based on F&Guide).
The technology (IT) industry describes Samsung Electronics’ business group as a “dream portfolio.” First, the DX (Device eXperience) division makes home appliances and network equipment such as smartphones (Galaxy), TVs, monitors, refrigerators, and washing machines. As of the end of June, it is the largest business unit, accounting for 58.4% of Samsung Electronics’ sales.
The DS (Device Solutions) business unit is an area that the world is paying attention to by supplying all semiconductors. It seems that it is recently growing its consignment business (foundry) for big tech customers, focusing on memory semiconductors including HBM. Wall Street evaluates this very sector as a business unit that will determine Samsung Electronics’ performance by 2029.
SDC (Samsung Display) is literally “Samsung that makes screens.” It supplies smartphones, TVs, and automotive displays. Harman, considered Samsung’s largest M&A, makes the “brain” and “ear” of tea and audio. This field is also evaluated as a net business.
The securities industry believes that some or all of Samsung’s businesses can be revived by growing the entire business market that OpenAI grows. Among them, the demand for memory for data centers, especially HBM, for AI servers, is expected to increase rapidly, and Samsung’s DS business is expected to contribute to sales and net profit.
Industry sources predict that Samsung will compete on the same level as Hynix in the HBM4 trading market. Samsung Electronics is still lagging far behind Hynix in mass production, but if the company’s monopoly structure is broken, it is widely expected that Samsung Electronics will come in second place unconditionally. It means that ‘Kkaboo meeting’ is a signal.
HBM has a higher unit price (ASP) than other memory chips. It also increases the possibility of a surge in net profit. Perhaps Samsung Electronics’ net profit ratio of 9.8% in 2024 is a low figure that will not be seen again. Starting with this year’s expected net profit margin of 11.1%, it is estimated to soar to 16.9% next year, 18% in 2027 and 23.6% in 2028.
HBM is a special memory chip. On the other hand, most of Samsung’s performance was made up of general (universal) chips. It was affordable. But things have changed. As the AI market has grown so large, regular DRAMs are also needed, and only three global companies (Samsung Electronics, Hynix, and Micron) make this chip. This is the reason for the recent surge in prices.
According to market research firm DRAM Exchange, the price of DDR48Gb (1GX8) 2666 soared to $8.95 on the 5th of this month, which was $2.4 on May 21. DDR4 and DDR5 are typical general-purpose semiconductors. DDR5 16G (2GX8) 4800/5600 price broke $20 on the 7th of this month from $5.5 on May 16. Samsung Electronics, the world’s No. 1 chip maker, is benefiting from the surge in general-purpose chip prices.
As of Nov. 7, 36 global investment banks presented their target prices for Samsung Electronics. Their average price target is 126,071 won. Analysts say that 28.6% of the current stock price remains to rise. It is an attractive number for investors in individual AI-related stocks.
However, Samsung Electronics is always burdened with huge facility investment. According to FnGuide, the annual dividend estimate per share is expected to drop from 1,583 won in 2026 to 1,464 won in 2027. It is also a bad news for dividend investors as it is deeply related to the semiconductor investment cycle.
Hyundai Motor is the world’s second largest in the number of GPUs after unexpected AI benefits,··Tesla
Nvidia announced that it will supply 260,000 Blackwell-affiliated AI chips to Samsung and Hyundai Motor. It is estimated that up to 50,000 of them will be allocated to Hyundai Motor Group. With this volume, Hyundai Motor will immediately develop an ultra-large AI model and have an inference infrastructure.
50,000 GPUs are ranked second in the global automobile company’s ranking. It is becoming the next AI beneficiary right after Tesla. Hyundai has decided to build an NVIDIA AI supercomputer. It is expected to be used for AI and autonomous driving verification in vehicles, smart factories (intelligent factories), and robot businesses. It has easily gained a large ‘weapon’ (GPU) for the transition to a futuristic business structure similar to Tesla’s. It is expected to be relatively strong compared to Chinese automakers.
Hyundai Motor is easier to estimate its future performance than Samsung Electronics. The sales structure is simple as a financial business related to vehicle sales. Sales, which were 175 trillion won last year, are estimated to exceed 200 trillion won for the first time in 2027. Analysts say that the margin rate will continue to rise if it is better than Samsung.
Estimates show that this year and next year are 6% from last year’s net profit margin of 5.8%, and 6.5% and 6.6% in 2028 and 2029, respectively. Hyundai’s competitiveness in luxury cars has been recognized in the U.S. and Korea, but the risk of strong union activities has been offset by the burden of labor costs. In the future, expectations that robots will reduce Hyundai Motor’s cost burden are reflected in its performance.
On Wall Street, GPUs and robotics (Boston Dynamics) are not expected to immediately address Hyundai Motor union risks. However, it is Boston, which was secured through AI factories and M&AThere is a steady expectation that the combination of Naein Mix will reduce the cost of production disruptions in the mid to long term and give investors relief.
Hyundai Motor remains attractive to dividend investors. Currently, the dividend yield of 4.5% is more than twice the deposit rate of domestic commercial banks. The expected dividend for fiscal 2025 is estimated to rise steadily from 12,128 won per share to 12,679 won in 2027.
Based on the expected net profit over the next year, Nvidia’s price-earnings ratio (per-yahoo finance) is 30 times higher. Samsung Electronics is 15 times the figure, and Hyundai is 8.3 times the figure. Hyundai Motor is the most undervalued stock among the “Three Musketeers of the Kkonbu Association.” However, there is a logic that Nvidia is the largest beneficiary of AI, and its beneficiary strength weakens from Samsung to Hyundai Motor, and such PER is justified.
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