Goldman Sachs Forecasts Extended Memory Boom
The investment bank’s report indicates that the market has yet to fully grasp the durability of the current memory upcycle. Most memory stocks are currently trading at mid-single-digit Price/Earnings (P/E) multiples, which Goldman Sachs believes undervalues their future earnings potential. The firm has reiterated “Buy” ratings for both Samsung Electronics and SK Hynix, citing substantial upside from their latest closing prices. Kioxia (285A.JP) also received an upgrade to “Buy.”
Goldman Sachs highlights several critical distinctions in the current cycle compared to previous ones. These factors are expected to support persistent demand outpacing supply. Firstly, there is higher demand visibility, primarily driven by a significant expansion in the server and AI mix, alongside the ongoing development of agentic AI. Secondly, supply growth is constrained due to slower capacity expansion and higher HBM conversion ratios. Finally, the industry benefits from more binding long-term agreements with customers and more efficient capital expenditure planning. These structural changes are anticipated to result in a longer upcycle than previously observed.
Revised Earnings and Price Targets
Based on higher average selling price (ASP) assumptions, Goldman Sachs has substantially raised its earnings forecasts for both Samsung Electronics and SK Hynix. The firm expects DRAM, NAND, and HBM to remain in undersupply through 2028.
Memory Sector Financial Outlook
- Samsung Electronics Conventional DRAM ASP: Forecasted to increase 326% year-over-year in 2026 and 27% year-over-year in 2027.
- Samsung Electronics NAND ASP: Projected to rise 283% year-over-year in 2026 and 33% year-over-year in 2027.
- HBM ASP Growth: Could see around 50% growth in 2027.
- HBM Total Addressable Market (TAM): Estimated at USD 56 billion in 2026, USD 116 billion in 2027, and USD 168 billion in 2028.
- Samsung Electronics Operating Profit: Expected to reach 374 trillion won in 2026, 530 trillion won in 2027, and 610 trillion won in 2028.
- SK Hynix Operating Profit: Projected to record 271 trillion won in 2026, 401 trillion won in 2027, and 454 trillion won in 2028.
The broker adjusted its valuation methodology for SK Hynix to a P/E approach, setting a 12-month target price of 3.5 million won, based on 9x P/E, implying a 53% upside. Samsung Electronics’ 12-month target price was lifted to 480,000 won, also implying about 9x P/E and a 60% upside from recent closing prices.
Looking Ahead: Sustained Profitability Expected
The revised outlook from Goldman Sachs underscores a conviction that memory companies are poised for an extended period of elevated earnings. The confluence of strong AI-driven demand, disciplined supply management, and more stable customer agreements suggests a fundamental shift in the memory market’s cyclical nature. Investors will be closely watching for further indications that the broader market begins to align with this more optimistic, long-term view.
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