Goldman Sachs has released its latest research report, reiterating a "Buy" rating on Samsung Electronics. The firm believes Samsung Electronics' fundamentals remain solid, with memory demand continuing to significantly outpace supply, and this gap is expected to widen further in 2027 and persist through 2028. The company's HBM business continues to improve, with revenue expected to surpass 100 trillion won next year, supported by both rising volumes and prices. Additionally, there is upside potential in shareholder returns. The current stock price corresponds to just 3.6x P/E and 1.6x P/B for 2027E (with ROE reaching 53%), which Goldman Sachs views as offering an attractive risk-reward profile.

In the report, Goldman Sachs stated that it has revised down its 3Q26 operating profit estimate for Samsung Electronics by 5% from the previous 112 trillion won to 106 trillion won, primarily reflecting the impact of a stronger-than-expected Korean won against the US dollar during the quarter 鈥?the actual average exchange rate was 1,418 won per US dollar versus the previously assumed 1,460 won. Despite the downward revision, Goldman Sachs still expects quarterly operating profit to exceed 100 trillion won, mainly driven by strong fundamentals in the DRAM and NAND businesses, particularly the continued robust growth of the HBM business.

Goldman Sachs noted that the updated 3Q26E estimate is broadly in line with market consensus (BBG), while its 2027-2028 earnings estimates are 8%-17% above the market benchmark, primarily reflecting higher DRAM ASP assumptions (especially for HBM), whose impact outweighs the drag from lowered conventional DRAM bit shipment estimates. Goldman Sachs believes the company's focus on the HBM business will relatively constrain conventional DRAM bit output, thereby further intensifying supply tightness in 2027.

HBM Business Emerges as Core Growth Engine, 2027 Revenue Expected to Reach US$74 Billion

Goldman Sachs significantly raised its HBM ASP estimate for Samsung Electronics next year in the report, now expecting approximately US$3.6/Gb, a year-over-year increase of 130%; shipments are also expected to grow by more than 60% to approximately 21 billion Gb. Driven by this, Goldman Sachs expects the company's HBM revenue to grow 274% from US$20 billion this year to US$74 billion next year (approximately 100 trillion won), with HBM's share of DRAM revenue jumping from 8% this year to 19%.

Goldman Sachs particularly emphasized that Samsung Electronics is actively expanding its HBM business by leveraging its strong positioning with ASIC customers such as Google (GOOGL.US) TPU, as well as gaining market share in NVIDIA (NVDA.US) HBM4 supply. According to supply chain research, the company has leveraged its smooth capacity ramp-up to secure significantly higher HBM pricing and shipments.

On the DRAM side, Goldman Sachs expects 3Q26E DRAM bit shipments to grow 4% quarter-over-quarter, with blended DRAM ASP rising 14% quarter-over-quarter, broadly in line with previous estimates. Among these, conventional DRAM bit shipments are expected to remain roughly flat due to limited inventory levels, while HBM bit shipments are expected to grow nearly 50% quarter-over-quarter on the back of strong HBM4 shipments. Due to negative currency effects, the DRAM business operating profit estimate was lowered by 4% to 81.8 trillion won, with the operating margin maintained at a high level of 81%.

On the NAND side, Goldman Sachs expects 3Q26E NAND bit shipments to grow 7% quarter-over-quarter, with blended NAND ASP rising 17% quarter-over-quarter, broadly consistent with previous estimates. Notably, KV cache demand driven by AI agent inference is pushing up incremental eSSD demand, prompting Goldman Sachs to raise its 2027E/2028E bit shipment and pricing estimates. Although the 3Q26E NAND operating profit estimate was lowered by 4% to 26.8 trillion won (operating margin of 67%) due to currency factors, Goldman Sachs raised its 2027E/2028E NAND margin estimates, as higher NAND ASP estimates are sufficient to offset the impact of lowered exchange rate assumptions.

Foundry/System LSI, Display, Mobile, and Consumer Electronics Businesses

Additionally, Goldman Sachs widened its 3Q26E operating loss estimate for Samsung's foundry/System LSI business from the previous 1.2 trillion won to 1.7 trillion won, mainly reflecting negative currency factors and higher-than-expected fixed cost burdens. However, Goldman Sachs still expects the business to gradually improve capacity utilization over the coming quarters, particularly benefiting from strong demand for advanced-node foundry services. Goldman Sachs expects the business's operating loss to narrow by 5 trillion won in 2027E and is expected to achieve a turnaround in the second half of 2027, when capacity utilization is projected to exceed 90%.

For Samsung Display (SDC), Goldman Sachs maintained its 3Q26E operating profit estimate unchanged at 1.0 trillion won, as currency headwinds were offset by robust ASPs driven by an improved flexible and foldable OLED product mix. For the Mobile eXperience (MX) business, Goldman Sachs lowered its 3Q26E operating loss estimate from 1.4 trillion won to 1.8 trillion won, mainly due to a greater impact from rising component costs including memory chips. Given higher DRAM and NAND ASP assumptions for 2027E/2028E, Goldman Sachs cut its operating profit estimates for the MX division for those two years by 40%-50%. For Consumer Electronics (CE), Goldman Sachs lowered its 3Q26E operating loss estimate from 0.3 trillion won to 0.4 trillion won, reflecting slower-than-expected demand tracking for TVs and home appliances, as well as the potential impact of rising component costs.