In a recent note, Citi analysts reiterated their Buy rating on Samsung and SK Hynix, despite concerns over the memory chip market peaking. The investment bank notes that demand for memory chips remains strong, driven by growth in the datacentre and artificial intelligence (AI) sectors.
Samsung and SK Hynix are among the leading players in the memory chip market, with a significant presence in the global supply chain. Analysts at Citi believe that the companies' strong positions will enable them to maintain healthy profit margins, despite any potential fluctuations in memory chip prices.
The memory chip market has been a major contributor to the recent surge in tech stocks, with Samsung and SK Hynix leading the charge. However, market fears over the market peaking have led to a recent decline in their share prices. Citi's analysts argue that these fears are overblown and that demand for memory chips will remain strong in the long term.
Key movers in the memory chip sector include Micron, Western Digital, and Kioxia. The sector has been volatile in recent months, with prices fluctuating in response to changes in global demand. Analysts expect the sector to remain volatile in the short term, but ultimately remain positive on the long-term prospects for tech stocks.
Citi's analysts have set a price target of £120 for Samsung and £150 for SK Hynix, based on their strong growth prospects and dominant positions in the memory chip market. The investment bank believes that these stocks offer attractive opportunities for long-term investors, despite the recent market volatility.