Goldman Sachs Raises Price Targets for Micron, Samsung Electronics, and NVIDIA: Valuation Framework Shifts from P/B to P/E

June 1 – Goldman Sachs released a comprehensive global semiconductor storage industry report, significantly lifting target prices for three key players: SK Hynix, Samsung Electronics, and Kioxia. Specifically, SK Hynix’s target price was hiked to 3.3–3.5 million South Korean won (implying ~53% upside), Samsung Electronics’ target jumped to 480,000 South Korean won (~60% upside), and Kioxia was upgraded to a "Buy" rating with a 12-month target price of 93,000 Japanese yen. Goldman’s revisions hinge on a historic shift in the storage sector’s valuation framework: The firm cites AI-driven sustained demand, supply constraints, and widespread long-term agreements (LTAs) as core drivers moving the industry from a highly cyclical commodity track to an AI infrastructure segment with predictable profitability. The sector’s benchmark valuation has officially switched from Price-to-Book (P/B) to Price-to-Earnings (P/E), currently anchored at roughly 9x P/E. The report also drastically revised supply-demand gap forecasts, predicting persistent shortages across DRAM, NAND, and HBM through 2028—with HBM facing the tightest crunch. It raised its 2027 HBM market size estimate by 54% to $116 billion. Earlier, Morgan Stanley and JPMorgan had also noted that broad LTA adoption is turning storage giants’ cyclical businesses into tech infrastructure with stable cash flow properties. Currently, the sector trades at a 50–80% discount to TSMC on a forward P/E of just 7.3x, presenting a historic valuation-narrowing opportunity. But Goldman sounded a critical caution: The only solid evidence supporting the new valuation model is tangible prepayments on balance sheets and legally locked deferred revenue obligations. Without such proof, the "cross-cycle" narrative risks repeating the pitfalls of forward contracts becoming worthless, as seen in 2017.