Samsung Electronics has joined the rarified air of companies valued over a trillion dollars as its stock continued to be boosted by the boom in artificial intelligence.
Shares of the world’s top memory-chip maker have more than doubled this year, thanks to AI’s red-hot demand for its chips.
On Wednesday they jumped 13% in early trade, bringing Samsung’s market capitalization to 1,530 trillion won, equivalent to $1.04 trillion. It is only the second Asian company with a market valuation above $1 trillion, aside from Taiwan Semiconductor Manufacturing Co.
Investors have been piling into the tech sector recently, with appetite for Samsung further boosted by its record first-quarter earnings last week. Its revenue, net and operating profits scored all-time highs.
There is also little sign that chip demand will slow anytime soon. The company said it production capacity was fully sold out for this year. Samsung is widely expected to continue benefiting from tight supply and high prices for memory products, as the global AI-infrastructure buildout continues.
Its chip-making division posted a record operating profit and accounted for more than 90% of the company’s total earnings for the quarter, outweighing the sluggish performance in other segments.
Samsung expects revenue from high-bandwidth memory products—a critical component of AI chips—to more than triple this year, with its recently launched HBM4 likely to account for more than half of total HBM revenue.
Nomura analysts noted that chip makers are shifting toward more secular growth, moving from the highly cyclical patterns of the past.
That should lower the risk premium on Samsung’s shares as the company will be supported by longer supply contracts, they added in a recent note.
“We expect the trend should help gradually alleviate the excessive discount applied to the share price in the market,” the analysts led by C.W. Chung said in a note.
Samsung’s surge helped drive Korea’s benchmark Kospi index 6.7% higher to 7402.18, above the 7000 level for the first time.
Write to Kwanwoo Jun at Kwanwoo.Jun@wsj.com
