Janice R. Andrews
Investors are closely examining Samsung Electronics Co. amid a flurry of market activity sparked by Nvidia Corp.’s surprise endorsement; despite the company’s recent gain, worries remain.
Even while Nvidia’s support may have given Samsung more hope in the artificial intelligence (AI) space, other investors are still pessimistic. The endorsement has sparked discussions about Samsung’s capacity to catch up, especially in light of SK Hynix Inc.’s hegemony in providing Nvidia with high-bandwidth memory (HBM).
While acknowledging Samsung’s increased appeal, DS Asset Management Co. fund manager Yoon Joonwon advises caution, saying, “It’s too early to buy it on expectations for its HBM business.”
The divergent paths taken by Samsung and SK Hynix illustrate the effects of their different market shares for semiconductors. SK Hynix’s stock have doubled in the last year due to a notable increase in demand for its HBM chips, which are essential for training AI models. Samsung, on the other hand, had a meagre 30% growth, which is partially explained by its susceptibility to cyclical demand and price swings in conventional memory markets.
Suspicions were aroused when Nvidia CEO Jensen Huang hinted at possible negotiations with Samsung for HBM chips. With this news, Samsung’s shares had their biggest weekly rise since 2015, rising a stunning 10%.
Options traders, on the other hand, display a divided attitude, which is indicative of the uncertainties surrounding Samsung’s future course. Some hedge their positions with puts, ready for a possible decline, while others place bullish bets, expecting a spike in stock value.
Unlike institutional investors, retail traders chose to sell off a sizable portion of their Samsung shares after Nvidia’s support. This difference in trading patterns highlights the differences in opinions held by the market about Samsung’s future in the AI space.
Cha So-yoon, a fund manager at BNK Asset Management Co., highlights SK Hynix’s ongoing supremacy in this market by noting, “Majority opinion is still that Samsung won’t be getting the call on HBM3E from Nvidia,” echoing the general pessimism.
Although enthusiasm has been generated by Nvidia’s support, Samsung will have a difficult time persuading investors that it can catch up to SK Hynix in the HBM market. Samsung’s strategic moves will come under intense scrutiny as the digital environment changes, and its performance in the AI space will have a significant impact on how the company develops in the semiconductor sector.
